Benefits explained for families with children. The past year has left people struggling financially. Rosecroft Health & Safety spoke to Safia Akram, a welfare rights advisor who has worked giving advice in the charity sector for the past 25 years. We asked Safia what families with children might be entitled to, how to claim and where to get advice.
What benefits are out there for families?
Child benefit is the biggest and easiest benefits to claim and often people don’t claim it. Claim this benefit through GOV.UK. This is for people with a child or children, under the age of 19 and in full time education (education under Degree or Higher National Diploma level) It is not a capped benefit and can be claimed for each child. It requires proof of birth of the child, evidence of parental responsibility or that you are the biological parent.
There are rules around what you can earn when you claim child benefit. Earnings of £50,000 and £60,000 per year result in losing a proportion of child benefit. This is because it counts as an additional income on top of your salary, self-employed income, share income etc.
Safia says that very few people meet that criteria and lots of people miss out as they think that they will have to repay the benefit or don’t qualify. It’s best to claim this benefit especially if you unsure of what your earnings are going to. As child benefit cannot be backdated for more than 3 months, and it’s easier to make repayments if you find you are not entitled to it due to earnings.
The importance of child benefit
Safia says it is important to have it in place as it’s proof you have a child which you may need to claim other benefit entitlements. For example if you are on a low on a low income you could make a claim for Universal Credit. Also, if you have children under 12, child benefit helps with national insurance contributions under home responsibility, which in turn will help with your state pension.
Universal Credit is a benefit for those who are both in work or out of work it replaces Income Support, Employment Support, Job Seekers Allowance, Working Tax Credits and Child Tax Credits.
If making a new claim for benefits you will be making a claim for Universal Credit. This is not a benefit for unemployed. It is for people on low incomes, who have health needs, caring needs or disabilities. It is open to working and non-working parents, single people with or without children, who have rental liability. Housing costs are not covered for mortgage holders for homeowners. However, there is some provision to protect and safeguard those with mortgages later down the line once they’ve made a claim for Universal Credit. The Mortgage Support Scheme offers this as a loan. Claimants should seek advice if they want help with mortgage costs.
Universal Credit is made-up of different elements
This is a fixed amount that the Government says you need to live on. It’s not a huge amount but it is intended as a threshold to help keep you safe.
Different payment rates apply depending on whether you are:
- Single and over the age of 25
- Single and under the age of 25
- In a couple where both persons are over the age of 25
- In a couple where one person is under the age of 25
For under 25s a lower payment rate applies. Couples where one person is under the age of 25 qualify for a lower rate.
The lower rate also applies to pensioners in mixed age couples. Where one partner is retirement age and the other is younger Universal Credit must be claimed instead of Pension Credit.
The housing element applies to people living in rented accommodation. The amount claimable is capped at the Local Housing Allowance. This depends on which area you live in. Check the rate for your area at DirectGov by typing in your postcode or local authority area and the number of bedrooms you are entitled to.
Safia stresses it’s important to find out how much you are entitled to before taking on a tenancy as rent might still be unaffordable. The housing element may not cover the rent.
The housing element remains the same whatever your circumstances. If your circumstances changed midway through a tenancy entitling you to apply for the housing element, the set amount for your area applies. This may mean your rent becomes unaffordable.
The child element applies to every child you have who is under the age of 19 and in full time education. The amount is capped at different rates depending on the ages of your children, rules can be complicated with the benefit cap and the 2 child policy (for children born after April 2017), so a benefit check is advised.
The carers element replaces in part the Carers Allowance. This element applies to people looking after a person with a disability or health need and in receipt of an underlying benefit such as:
- Attendance Allowance if you are over pension age
- Disability Living Allowance if you are under 16 with a disability or health need
- Personal Independence Payments (PIP) if you are over 16 but under retirement age and have a disability or health need
Safia emphasises caution before applying for any carers element you claim on behalf of a person.
Firstly, the person who you are claiming for needs to give you permission to do that. Secondly, seek independent advice before claiming. The claimant may be getting a premium they are entitled to because they live on their own or live with someone who also has a disability or health need. The financial impact of losing these premiums is immense. There are other criteria that needs to be met. More information can be found here on GOV.UK.
Where to get advice
Many organisation provide advice and much of it is readily available online and most have freephone numbers*. Benefits calculators features on many websites. In these you can put in our details and remain anonymous. These are a good starting point if you think you might want to make a claim.
* Telephone provider charges may apply.
Advice giving organisations include:
Citizens Advice – all information is legally correct and updated frequently
Age UK for people over the age of 50
Gingerbread for single parents. Their dedicated advice line operates 7 days a week for advice on benefits and legal issues at work, domestic abuse, ending a marriage, childcare arrangements
Working Families if you’re working. Their information line operates during office hours
Maternity Action if you are pregnant and/or feel you have a dispute at work could be pregnancy related discrimination. Benefits checks are available if you are pregnant, had a child or thinking of starting a family
Kinship (formerly Grandparentplus) for kin relatives looking after a child who is living with you advice lines such as grandparents, aunts, uncles, siblings and family friends
Entitled to is a benefit calculator provider. They provide some advice and information on what your entitlement would be and how that would be calculated.
Turn2us – helps people in financial need gain access to welfare benefits, charitable grants and other financial help
Note on benefits calculators
Note that benefits calculators are not completely accurate. They often don’t account for a lot of the real life situations we find ourselves in. For example, if you’ve finished working, taking an unpaid break, carers break or changed hours. However, they are a starting point and signposting tool. Once you have the information from them seek advice before applying for any new benefit especially universal credit*
*once a claim for universal credit is made and accepted it cannot be cancelled and you will not be able to go back to your old benefits
How to apply
Claim online for Universal Credit and associated elements at GOV.UK. For couples both partners must provide their details. All details provided must be accurate. No IT skills or access to internet? Claims can be made by phone. Safia does say online is the quickest option and easier to manage online especially with reporting changes and checking on payments.
How long does it take for a claim to process?
It can take up to 5 weeks to process the first claim. If you are going to need financial assistance whilst you wait for the first payment, you can ask for an advance payment, this can be done via your online account or by phone. This takes the form of a n interest free loan and with payments deducted from your universal credit over the next 12 months. This means you will receive less each month, so borrow the minimum.
When should you claim?
You can make a claim for Universal Credit before your change of circumstances. If you’re worried about losing your job or know you’re being made redundant. All the benefits are paid from the day you made the claim so it is best to make it as soon as possible.
There are some concerns about claiming too early. It could mean that in the first month you apply you could find that you are not entitled to anything. This is because income you receive in the first four or five weeks of your claim such as redundancy payments, holiday payments or wages paid to you counts as income for that month. If you are expecting income or a payment within that period of your claim the advice is usually to wait for that payment to come into your account and has cleared before you submit your claim. That way your assessment period starts on the day you make the claim and the previous months income is not taken into account.
It’s always best to get advice as to when the best time to claim is.
Can benefits be backdated?
Most benefits cannot be backdated unless there are very exceptional good reasons Benefits that can be backdated in some circumstances are:
- Carers Allowance – up to three months
- Child Benefit – up to three months.
- The new style job seekers allowance – up to three months. This is only payable for 26 weeks
- New style Employment Support Allowance – up to three months. Payable to people who have worked and paid national insurance contributions but find due to ill health or disability find they are unable to work.
Savings under £6,000
If you have savings of under £6000 you can safely apply for Universal Credit.
Savings between £6,000 and £16,000
If your savings are between £6000 and £16,000 then there is a tariff income that the Department for Work and Pensions (DWP) applies to those savings. This is about £4.25 for every £250 of savings you have.
If you have £10,000 of savings your entitlement will be reduced by about £20 per week for Universal Credit.
Any change in your savings must be reported to DWP.
Savings over £16,000
Savings over £16,000 take you out of most entitlements for benefits apart from disability benefits or carers benefits which you may be entitled to. Benefits are capped at £16,000 for most people. Pensioners are entitled to a little bit more as they can claim Pension Credit where a different calculation applies. If you are applying for contribution-based benefits such as job seekers allowance of new style employment support allowance, there is no capital limits for these benefits.
Tax Credits are being phased out and replaced by Universal Credit. Until that happens the two systems exist.
Some people still get Tax Credits as they haven’t been transferred over or changes in their circumstances haven’t led to automatic transfer.
If you’re in receipt of Child Tax Credit, not getting Working Tax Credits and starting a job or been offered a job, you don’t currently have to transfer to Universal Credit. This applies as long as you have a live claim at the time your circumstances change. For example, you are getting Child Tax Credits (live claim) and started a new job. In this instance the Working Tax Credit element can be added on to your Child Tax Credit. This can be more generous than Universal Credit. Check this with an independent advice agency such as the ones mentioned above before applying for a new benefit.
This also works the other way round. You could be getting Working Tax Credit because you’re on low income or make the age criteria and have a child or have a relationship where there is a child. In this case you can add the Child Tax Credit element on to your Working Tax Credits.
Once changed there’s no going back to Tax Credits
Once transferred on to Universal Credits from Working Tax Credits or Child Tax Credit you must remain on new benefit. It might not pay to change in the long run so check carefully that it’s in your best interests before changing.
Where do I check if I’m better off staying on Tax Credits?
Most of the organisations mentioned above give a better off calculations. For example Entitledto website has two separate calculators. One for your entitlements now. The other offers a better-off calculation. Here you can compare the two benefits and see which is better of you.
Always seek advice from independent advice agencies before changing your benefits.
A final note
This article, “Benefits explained for families with children”, is part of our Health and Safety at Home campaign focusing on families with babies and young children. Financial difficulties are often a source of stress. The intention of this article is information as starting point for research and signposting. Always seek advice from independent advice from qualified persons or agencies there to help.