Children in your household coming out of education can mean big changes to your income. This article explains how it can affect you and your income and what you can do.
If your child is going to continue in full-time non-advanced education, you may still be entitled to receive Child Benefit and Child Tax Credit, although you will need to notify HMRC and provide them with written confirmation from the school or college that your child will be attending.
However, if your child is going to apply for benefits or start work, this will have an impact on the following benefits.
1. Housing Benefit – You will have an adult non-dependant deduction taken from any Housing Benefit entitlement (please see below for exceptions). The amount of the deduction will depend on your child’s earnings.
Important: If you do not provide details of your child’s earnings to the Housing Benefit Department, they will take the maximum deduction from your Housing Benefit. If you do not inform Universal Credit, this may result in an overpayment.
2. Council Tax – If you are a single parent, you will lose the Single Occupancy discount.
3. Child Tax Credits / Child Element of Universal Credit – This will no longer be payable for any children not in full-time education.
4. Child Benefit – The same applies as with Child Tax Credits.
You may find that these changes to your income are difficult to manage. It is important that your child contributes to the household expenditure to help cover costs. This also provides them with valuable budgeting skills for the future.
In addition to the Council Tax and rent, you may wish to ask for a contribution towards household bills such as food and utilities.
When is a non-dependant deduction not made?
No deductions will be made if you (or your partner) are:
- Registered blind
- Receiving Attendance Allowance
- Receiving the care component of Disability Living Allowance (at any rate)
No deductions will be made if the non-dependant is:
- Receiving Pension Credit
- Aged under 25 and gets Income Support, income-based Job Seekers Allowance or Universal Credit
- Gets a youth training allowance
- Is a prisoner
- Is a full-time student
- Has been in hospital for more than 52 weeks.