How your benefits are means-tested
If a benefit is means-tested, this means that your eligibility to claim it and how much money you receive will depend on your income and how much capital you have. The information in this section only applies to people over State Pension age.
Which benefits are means-tested?
What is included in a means-test?
Some types of income are fully considered when assessing whether you’re eligible to claim a means-tested benefit, but others (such as if you receive Attendance Allowance) are ignored. Your partner’s income and capital may also be taken into account.
Capital includes savings and investments. Examples of capital taken into account in means tests include:
- stocks and shares
- a share of any savings you own jointly with other people
- property other than your main home
- Premium Bonds
- National Savings accounts and certificates (there are special rules for valuing these).
Any lump sum payments you received from deferring your State Pension is not included as capital.
What are the capital limits for means-tested benefits?
Your income and capital must be below a certain limit for you to be eligible to claim any means-tested benefit. This level is an estimate of the amount you need to live on and is set by the government.
Each benefit has different eligibility criteria which your income and capital must need for you to be able to claim. If your income and capital are greater than this level then you may not be eligible to claim, or you may receive a reduced amount.
Below are examples of the capital limits and how they can affect your benefits claim:
Housing Benefit and Council Tax Reduction
These benefits have a lower capital limit or £10,000 and an upper capital limit of £16,000. If you have less than £10,000 of capital then the amount of capital you have will not affect how much Housing Benefit or Council Tax Reduction you can receive. If you have between £10,000 and £16,000 then your capital will reduce any potential Housing Benefit or Council Tax Reduction award.
However, if you have more than £16,000 in capital then you may not be able to claim Housing Benefit or Council Tax Support. This rule doesn’t apply if you receive the Guarantee Credit part of Pension Credit.
There is no upper capital limit for Pension Credit but you may receive a reduced amount if you have more than £10,000 of capital. For every £500 or part of £500 of capital over £10,000, you’ll be treated as having ‘deemed income’ of £1 a week. This is added to any other income you have, such as a pension.
- Refer to the pages on our website covering the means-tested benefits listed above for full information
What should I do next?
What extra money are you entitled to?
On average, our benefits calculator identifies an extra £250 per month for each person. How much money could you claim?
For more information call Age Cymru Advice on 08000 223 444