Being in work does not rule out benefits
A common misconception is that if you are employed full time, you cannot claim any benefits. That is not the case. Many of the UK's most significant benefit payments are available to people who work — the eligibility depends on your income, household size, housing costs and circumstances.
The benefit system has shifted significantly over the past decade. Universal Credit in particular is designed to top up wages for people in low-to-moderate income households, rather than being reserved for people who are out of work.
Universal Credit for workers
Universal Credit (UC) can be claimed by people who are in work and earning below a certain level. The amount you receive tapers down as your earnings rise, but many households in work remain eligible.
The key threshold is the Work Allowance — an amount you can earn before UC starts to be reduced. Above the Work Allowance, 55p is deducted for every £1 you earn. This means extra earnings reduce your UC but do not eliminate it immediately.
UC also includes housing support (replacing Housing Benefit), childcare cost support (up to 85% of eligible childcare costs), and other elements depending on your circumstances.
Child Benefit and child-related payments
Child Benefit is paid for every child under 16 (or under 20 if in approved education). It is not means-tested at lower income levels. If you or your partner earns more than £60,000, a High Income Child Benefit Charge may apply — but it is still worth claiming and paying the charge, as it protects your National Insurance record.
Free childcare hours are available for children from age 9 months (subject to income thresholds for some entitlements) and Free School Meals are available for children in qualifying households.
Council Tax Reduction
Council Tax Reduction (also called Council Tax Support) is available to working households on low incomes. The exact scheme varies by council and each local authority sets its own rules, but most provide a reduction for households where income is below a certain level.
Applying is straightforward — contact your local council or apply online. Do not assume your income is too high without checking, as the thresholds are often higher than people expect.
Other benefits worth checking
Working Tax Credit still exists for some households who claimed before Universal Credit was introduced in their area. Healthy Start vouchers, the NHS Low Income Scheme, free prescriptions and free NHS dental treatment may all be available depending on income.
Carer's Allowance and Carer's Credit may also be available if you care for someone for at least 35 hours a week, regardless of whether you also work.