Benefits: Employment and Support Allowance

House of Lords written question – answered on 30th April 2008.

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Photo of Baroness Thomas of Winchester Baroness Thomas of Winchester Spokesperson in the Lords, Work & Pensions

asked Her Majesty's Government:

Whether any earnings from permitted work undertaken by claimants of (a) income-based employment and support allowance and (b) contribution-based employment and support allowance will affect any other benefits they may receive such as housing benefit or council tax benefit; and if so, how.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions) (also in the Department for Communities and Local Government)

Both contributory and income-related employment and support allowance claimants will be able to earn up to, and keep, £88.50 per week without affecting their entitlement.

Claimants on income-related employment and support allowance will be entitled to full eligible housing benefit and council tax benefit in the same way as those currently on income support. This includes those who are undertaking permitted work within the permitted hours and earnings limits and who, therefore, retain entitlement to benefit.

For main phase contributory employment and support allowance-only claimants, the earnings disregard for housing benefit and council tax benefit will remain at £20. Housing benefit or council tax benefit entitlement will, therefore, be reduced by any earnings above this. When combined with the housing benefit/council tax benefit taper, the £20 earnings disregard means that, overall, a person with earnings is better off than without, as they are allowed to keep around £30, not £20, of their housing benefit and council tax benefit if they earn £88.50.

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