Home Advice & informationAdoption Receiving benefits while on parental leave or after resigning: parents and carers of disabled children.

Receiving benefits while on parental leave or after resigning: parents and carers of disabled children.

Universal Credit

Tax Credits

Income Support

Carer’s Allowance

Jobseeker’s Allowance

Housing Benefit and Council Tax Reduction

Help with health costs

Working while also caring for a disabled child can be challenging. There are many ways that parents can take time off work; this could be for maternity leave, shared parental leave or unpaid parental leave. If you are taking leave and your pay is reduced, you should check whether there are any benefits you may be eligible for.

You may find that caring for a disabled child while staying on at your current job is simply not possible. In this case you may decide that you want to resign. However, resigning is a big step and you should think carefully about your options first. This includes what benefits you will be entitled to.

This article explores the types of benefits you might be entitled to if your pay is reduced by taking parental leave, or if you resign from your job and don’t earn anything.

It’s important to note that the following benefits will take into account your partner’s income or work status. This means that you may not qualify even if one of you is not earning anything.

  • Universal Credit
  • Tax Credits
  • Income Support
  • Housing Benefit
  • Council tax reduction
  • Jobseekers allowance

Universal Credit

Universal Credit has replaced a number of benefits for most people. See Gov.UK for exceptions. After making a claim for UC your other benefits which it replaces (such as tax credits, housing benefit and income support) will stop and you will not be able to reclaim them.

UC is paid monthly in arrears, therefore a reduction in your income should result in an increased award in the current month. If your earned income is above the ‘work allowance’ (the lower limit where earnings affect the award) but below the maximum earnings, then for every £1 that your earned income goes down your universal credit award will increase by 63p.

The rules about universal credit sanctions are complex, it may be possible that you are sanctioned for taking unpaid parental leave, this would mean that you would not receive the personal allowance part of your universal credit award. Your housing element and child element would not be affected.

You should not be sanctioned if you are the responsible carer for a child aged 2 or under or if you can show that you had good reason for taking unpaid parental leave, e.g. no affordable childcare available during the school holidays.

If you resigned from your job ‘voluntarily’ without good reason before making a UC claim you could be sanctioned, but not if you have a child aged 2 or under. Good reasons for resigning are similar to those which apply to jobseekers allowance (see above).

To qualify for UC, you must usually accept a ‘claimant commitment’. There are work-related commitments, which you may have to meet. For some people the claimant commitment might include: work-focused interviews, work preparation, work search and work availability. If you do not meet the work-related requirements, you may be sanctioned.

If your UC has been cut, including if you have been sanctioned, you may be eligible for a Hardship Payment. To qualify for UC hardship payments, you must either be a ‘vulnerable group’ or satisfy the DWP that you will ‘suffer hardship’ if UC is not paid to you. UC hardship payments are normally 60% of your normal entitlement. It is important to note that UC payments are usually a loan, so you will have to pay it back when your sanction ends. The jobcentre will usually get the money back by taking an amount out of your future UC payments until it is paid back.

You should inform the DWP that you wish to apply for a hardship payment as soon as you need one. You can either do this by going to the Jobcentre or ringing the DWP (0345 608 8545).

Tax Credits

New applications for Tax Credits have now been replaced by Universal Credit for most people (you can find exceptions on gov.uk). The following applies if you are already on Tax Credits or fall into one of those exceptions. Your Tax Credit award for the current year is based on your income from the previous year, this remains true unless your annual income changes by more than £2500. If your income in the current year drops by less than £2500 your tax credit award will not change, however you will get a higher award next year.

If you resign from your job you will continue to receive Working Tax Credits for 4 weeks. However, after 4 weeks you will lose your entitlement to Working Tax Credits. You should report the change to the tax credits office as soon as possible.  You can find information about the tax credits helpline here.

Income Support

As Income Support has now been replaced by Universal Credit, you are unlikely to be able to make a new claim for Income Support. The following information therefore only applies if you are already in receipt of it prior to going on parental leave. If you are on parental leave from work you are entitled to income support if all of the following apply to you:

  • You are responsible for a child who lives with you
  • You were entitled to working tax credit, child tax credit (payable at a higher rate than the family element) or housing benefit on the day before your parental leave began.
  • Your partner is not working
  • You are not entitled to receive any payments from your employer
  • You and your partner do not have capital worth over £16,000

If you do not meet the conditions above you can also qualify for income support if you are a single parent on a low income with a child under five and you do not have capital worth £16,000 or over.

If you or your partner receive SMP, maternity allowance or any wages these will be deducted from your income support award.

Carer’s Allowance

Carer’s Allowance can be claimed by parents and carers if they earn below the earnings limit and they care for someone receiving the daily living component of PIP or middle or higher rate care component of DLA. The threshold is after tax, National Insurance and some pension contributions and childcare costs have been deducted. Only your earnings count, not those of your partner. We have information about the Carer’s Allowance rate here.

If you stop work before you claim Carer’s Allowance, your final earnings do not generally affect your benefit. Provided your entitlement begins after the employment ends, you are still entitled to final wages and certain other payments (e.g. holiday pay, pay in lieu of notice, statutory or contractual redundancy pay). However, certain other payments are taken into account when working out your claim for Carer’s Allowance (e.g. maternity, adoption, paternity, shared parental and sick pay).

Jobseeker’s Allowance

You cannot claim jobseekers allowance if you are on parental leave from work.

If you have resigned from your job, you may be able to claim jobseekers allowance. However, if you resign ‘voluntarily’ without good reason, your claim can be delayed. Therefore, you must explain the reasons why you resigned. You should explain to the job centre: when you need to look after your children, why you couldn’t get help, any requests you made to your employer to change working hours, or any changes your employer made to your working pattern.

You are likely to be asked for evidence, so keep anything which could support your claim, such as: a letter from school or nursery, a copy of your contract, and messages between you and your employer.

Other accepted reasons for resigning include: taking voluntary redundancy, not being paid the minimum wage, unsafe working conditions, bullying or harassment, if you are on a zero-hour contract, or leaving the job during your ‘trial period’ (usually between 5 and 13 weeks after starting).

To qualify for JSA you must usually satisfy three job seeking conditions: be available for work, be actively seeking work, and have a current jobseeker’s agreement with the DWP. You may also have to take part in work-focussed interviews or work-related activity. If you fail to meet these requirements you may be sanctioned. You can find out more at GOV.UK.

If your JSA has been cut, including if you have been sanctioned, you may be eligible for a Hardship Payment. To qualify for JSA hardship payments, you must either be a ‘vulnerable group’ or satisfy the DWP that you will ‘suffer hardship’ if JSA is not paid to you. JSA hardship payments are normally 60% of your normal JSA entitlement.

You should inform the DWP that you wish to apply for a hardship payment as soon as you need one. You can either do this by going to the Jobcentre or ringing the DWP  (0345 608 8545).

 

Housing Benefit and Council Tax Reduction

These benefits are administered by your local authority and calculated on a weekly basis. You may qualify for an increased award during any week where your earnings are lower than usual.

The amount of Housing Benefit and Council Tax Reduction you are entitled to will depend on your personal circumstances (e.g. other income, benefits) and where you live.

Family Fund

The Family Fund gives discretionary grants to families with severely disabled children under 18. They have their own definition of ‘severely disabled’. The grants are for things not supplied by statutory authorities. Families on certain benefits can apply – the benefits include tax credits, Employment and Support Allowance, Incapacity Benefit, Income-Based Jobseeker’s Allowance, Income Support, Pension Credit and Housing Benefit. See www.familyfund.org.uk.

Help with health costs

You can qualify for help with health costs, for example prescriptions and sight tests, if you receive some benefits such as Income Support, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, and Guarantee credit of Pension Credit. Some people on Universal Credit may be entitled, and you may also be able to apply for help if you are on a low income.

 

 

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