Government assistance programs that help pay bills differ greatly by country. From the European welfare states providing extensive social security nets to almost no provision in many developing countries, the level of state help varies.
This article summarizes government assistance available to the citizens and those normally resident in the United Kingdom. This government assistance is normally referred to as “benefits” or (more narrowly) “social security” and is available to those with a right to permanent residence in the UK without immigration restrictions placed on “recourse to government funds”.
Help if you have children
Despite all Tory-introduced 2010 cuts, UK still has one almost-universal benefit (this is true at the time of writing in 2011), which is relatively low but available to a great majority of families. This is called Child Benefit and is paid to everybody caring for a child (or a young person in education) under 20 years old. This amounts to 20 GBP a week for the first child and 13 GBP for each additional one. Only families paying higher income tax rate don’t qualify.
Maternity Allowance is a state benefit for those who are (or were, in the previous year) working but don’t qualify for a Maternity Pay from the employer. This is 125 GBP a week and is usually paid for 26 weeks.
Child Tax Credit is a benefit for those on low income (in fact, you will get something, albeit not much, up to 40,000 GBP annual joint income), whether employed, unemployed and looking for work or just looking after the children. As the Working Tax Credit described below, it’s a tax credit just in name, and in fact it’s a benefit paid directly to you. It is income-dependent, but not rigorously means-tested. Broad brackets are used to work out whether a person qualifies and thus small changes in income are unlikely to influence the amount you are eligible for (unless you are unlucky enough for those last few hours of over-time to take you over to the next bracket). Savings and property assets don’t affect eligibility.
Help with housing costs
UK local councils administer a programme of two benefits, both designed to help with housing costs.
Housing Benefit is available to those who rent and whose savings don’t exceed certain amount (currently 16,000 GBP). It is heavily means-tested but for people on a very low income or unemployed it can be the route to paying all of the housing costs.
Council Tax Benefit is available to all (tenants or owner occupiers) on low income and might help paying the local tax called Council Tax.
Help while looking for work
Those who are unemployed but looking for and available for work might be able to get the benefit called “Jobseeker’s Allowance”. This is nothing else but the old-fashioned unemployment benefit (aka the dole) and comes in two guises, as “Contributions Based Jobseeker’s Allowance”, which is not means or savings dependent, and “Income-based Jobseeker’s Allowance” which is essentially a type of means-tested social security benefit for those who are looking for and available for work. The Income-based Jobseeker’s Allowance is at the time of writing 65 GBP per week (or 102 GBP for a couple) for people aged 18+. To get this benefit you need to be actively looking for work and might need to provide evidence of doing so at two-weekly (or more frequent) interviews.
Help while working on low income
If you are working for a minimum of 16 hours a week but your income is lower than a certain amount, you might qualify for Working Tax Credit. This is a “tax credit” only in name, and in the sense that is administered by the HMRC (UK’s Inland Revenue), but in actuality it’s a payment made to the claimant.
The rules that determine how much you will get are quite complex, but the benefits can be substantial, especially if you have children. A family with two adults working at least 16 hours a week and two children with a total annual income below 16,000 GBP will receive over 200 GBP a week in Working and Child Tax Credits. The Tax Credits are nominally means-tested, but the qualification is based on annual declaration and the amounts are calculated in brackets, so there is no penalty for moderate increase in income. Savings and property don’t disqualify from receiving Tax Credits, though any income from interest and rent would count. You can claim Tax Credits as a self-employed person as well as an employee.
There are numerous benefits available to people in specific circumstances, including extensive disability ans sickness provision as well as significant assistance for pensioners on low income, but it’s the programmes described above that are most commonly claimed and will be most helpful with paying the bills. The information is correct at the time of writing, check for up to date info and details on the tax and benefits DirectGov site.