There is a capital limit for Benefit of £16,000. Claimants with more than this amount are ineligible for Housing Benefit UNLESS THEY ARE IN RECEIPT OF PENSION CREDIT GUARANTEED CREDIT

Capital means any savings in cash or in a bank or building society, property, land, stocks or shares.

In working out the amount of capital, a claimant is treated as having capital belonging to:

1. the claimant himself or herself;
2. any partner he or she has; and
3. in certain cases, his or her children

Some examples of Capital

1. Capital which is (wholly or partly) taken into account for benefit purposes
2. savings in a bank, building society etc.
3. National Savings Certificates, stocks and shares
4. property (unless in disregarded category)
5. redundancy pay
6. Tax refunds
7. Savings in cash
8. Premium Bonds.
9. Stocks and shares, bonds and other investments.
10. Property or land (but not your home or the home of your partner or an aged or incapacitated relative).

These do not count as capital :

1. the claimant’s home
2. a self-employed claimant’s business assets
3. arrears of certain state benefits
4. certain compensation payments
5. a life insurance policy which has not been cashed in
6. Personal possessions.
7. Sale proceeds of your home (for up to six months if you intend to purchase another home).
8. Money from insurance claims in respect of loss or damage to home or personal possessions (for up to six months if used to replace or repair).
9. Any Social Fund payment.

If the claimant is under 60

If the claimant has less than £3,000 capital, this is ignored. If the claimant has more than £3,000 then a tariff income amount is used to calculate benefit. This means that for every £250 (or part of) over £3,000, £1 is counted as income. e.g. a claimant has £3,999.99 = £4 tariff income.

If the claimant is over 60

If the claimant has less than £6,000 capital, this is ignored. If the claimant has more than £6,000 then a tariff income  amount is used to calculate benefit. This means that for every £500 (or part of) over £6,000, £1 is counted as income. e.g. a claimant has £6,999.99 = £2 tariff income.

This page has been updated 4th August 2008 due to an error stating the tariff income on £6999 was £4 and in fact is £2. This information was reported to us by a kind user of the website.