When it’s OK to be in work and on benefits

The Minister for Welfare Reform, Lord Freud, made an infamous comment in October 2014 about the wages paid to working people with disabilities. This included an unwelcome suggestion that disabled workers might be paid at a rate below the minimum wage.

Lord Freud’s comment that disabled workers might be paid below the minimum wage sparked a heated debate. He also suggested that people with disabilities should be supported financially if they are in paid employment but on a low income. Many of our clients are already in the position of being in low-paid work and receiving earnings either at, or close to, the minimum wage.


However, there are benefits available for your clients to supplement low earnings, or help with certain costs such as rent, as explained below.


If a client is working, whether full-time or part-time, they may be able to get certain means-tested benefits or tax credits if they are on a low income. Some non-means-tested benefits can be paid regardless of whether the claimant is in work or not. The benefits they can get always depend on the individual circumstances of the claimant or their partner.


Working Tax Credit

Working Tax Credit (WTC) is income-based and is the main state benefit for people who are working ‘full-time’. Your client can get WTC if they (or a partner, where applicable) are working enough hours per week and their income is low enough.


A client with a learning disability can get WTC if they:

• work at least 16 hours a week and

• their income is low enough and

• they either currently get or used to get a qualifying benefit (see below) because of their disability and

• their disability ‘puts them at a disadvantage in getting a job’.


The qualifying benefits include, among others, Disability Living Allowance or Personal Independence Payment where paid currently, or Employment and Support Allowance when paid at any time in the previous 26 weeks before the WTC claim.


People in employment without a disability, including people with children, may also qualify for WTC.


Your client may be entitled to other income-based help. Clients who are responsible for rent and council tax may be entitled to Housing Benefit and Council Tax Reduction. These can be awarded whether the claimant is working full or part time. Whether or not these benefits are paid, and what amount is awarded, will depend on the circumstances of your client or their partner, including the level of their income, and any capital they have, such as savings.


Universal Credit will eventually replace tax credits and all the main means-tested benefits paid to people of working age. The calculation for Universal Credit means that the benefit will be ‘tapered’, or reduced, as earnings rise more gradually than happens under the existing system of mean-tested benefits.


Your client can claim Personal Independence Payment (PIP), or retain their Disability Living Allowance if they already get that benefit. (NB. DLA will eventually be phased out for existing claimants of working age and replaced by PIP for claimants who qualify for it). These benefits, to help with the extra costs of having a disability, can be paid regardless of whether they do any work or have any earnings or other income. Note, however, that if the nature of the work that a disabled claimant is carrying out in the course of their job causes doubt about their entitlement to PIP or DLA, or the level of award of PIP or DLA, then their benefit could be reviewed.


Carer’s Allowance

If your client is caring for someone who gets PIP daily living component or DLA care component (middle/highest rate) or Attendance Allowance they may be entitled to claim Carer’s Allowance. The carer can be in paid work but cannot be earning more than £104 per week after deductions, eg. national insurance.


Clients who are not working, and are claiming Employment and Support Allowance due to ‘limited capability for work’, may do any number of hours of voluntary work. They can also do ‘permitted work’. They can earn up to £20 a week for an unlimited period for any number of hours. Or your client can earn up to £104.00 after tax and national insurance deductions if the work is for less than 16 hours a week. They can normally do this work for 52 weeks. Or they can do ‘supported permitted work’ indefinitely and earn up to £104.00. This work means they are supervised by someone employed by a public or local authority, a community interest organisation or voluntary organisation which provides or finds work for people with disabilities.


This information provides only a summary of the main benefits available. If you have a client who is thinking of moving into work, whether part or full-time, they should get a full welfare benefit check from an experienced benefits adviser.


Further information on all of the benefits mentioned here:



Charlie Callanan is a welfare rights adviser with over 15 years experience in the charitable and statutory sectors.