The number of hours benefits claimants work have an impact on the payments that they receive as a result of an increase in their incomes. Through this article, we aim to assess whether it is better to work for 16 hours or 20 hours in order to continue claiming benefits. We will discuss the number of hours worked in comparison to the key benefits for claimants and explain the consequences in each case. 

Is It Better To Work 16 Or 20 Hours?

It appears that in most cases, claimants are better off working for 16 hours per week as compared to 20 hours. The reason for this is that as incomes rise with an increase in the number of working hours, the benefits claim of claimants reduces. As a result of this, they find themselves with a reduced income through earnings and benefits.

For instance, if you claim Income Support or Job Seekers Allowance, you must work less than or equal to 16 hours to be eligible for the benefit. If you work for more than 16 hours, you will be considered as working full time and will not qualify for the benefit claim. If you claim IS or JSA, your partner can only work less than or equal to 24 hours.

If you and your partner can no longer claim IS or JSA due to working for 20 hours or more per week, you can apply for Working Tax Credits. To qualify for WTC, the following conditions are to be met:

  • A claimant who is single and responsible for a child should work a minimum of 16 hours per week.
  • A claimant who qualifies for the disability element or who is above the age of 60 years should work a minimum of 16 hours per week.
  • Claimants who apply as a couple and are responsible for a child should work at least 24 hours between them. This means that one of them should work at least 16 hours per week.
  • Claimants who do not fall in any of these categories but are more than 25 years of age must work a minimum of 30 hours per week. 

You cannot claim Employment and Support Allowance if you work. If your partner works while you claim ESA, the number of hours that they work will reduce your benefits claim.

However, if you fall into any of the below categories, you can claim benefits and continue working for 20 hours or more:

  • Carers
  • Disabled people on a low income (due to disability)
  • Foster parents
  • Local Councillors 
  • People on certain training schemes
  • People living in residential care or a nursing home
  • Self-employed childminders
  • Share fishermen
  • Special occupations (such as. lifeboatmen, part-time firemen, Territorial Army, Volunteer Reserves and coastguards)

Benefits that are affected by the number of working hours that you are involved include the following:

  • Income Support
  • Jobseeker’s Allowance
  • Working Tax Credit
  • Employment and Support Allowance

If you are claiming Universal Credit (UC), your payments will not be affected by the number of hours you work. However, should an increase in hours increase your income above the minimum threshold for low income, your UC payments may decrease.

How Many Hours Should I Work To Claim JSA?

Those seeking Job Seekers Allowance must be able to fulfil the following criteria:

  • aged 18 years or above
  • under state pension age
  • currently unemployed or working for less than 16 hours per week
  • previously held a job
  • available for and looking for work
  • have employment rights in the UK
  • previously paid National Insurance (in the recent 2 to 3 years)
  • currently not in full-time education
  • do not have an illness or disability that prevents being employed
  • live in England, Scotland or Wales

Should the above criteria be fulfilled, candidates will be able to claim JSA for 6 months; after which they will be advised by their work coach with regards to employment options.

It must be noted that the claimant’s or their partner’s savings do not disqualify them from receiving JSA.

Once their JSA application is approved, candidates may expect payments on a fortnightly basis as per the bank account details shared during their claim. Applicants under the age of 25 may receive £59.20 per week while older candidates may expect £74.70 as JSA. It should be noted that people who are either unemployed or working for less than 16 hours per week, may be entitled to Universal Credit in addition to their JSA claim. 

How Many Hours Should I Work To Claim Universal Credit?

The number of hours an individual works do not have an impact on the claim for Universal Credit.

Universal Credit is a state benefit for UK citizens above the age of 18 and below state pension age. It aims to provide financial assistance to individuals who are either out of work or on a low income. It is a monthly payment that claimants receive to help them to cover living costs.

To qualify for Universal Credit, claimants must be able to fulfil the below eligibility criteria:

  • aged between 18 (in some cases it may be 16 or 17) and state pension age
  • unemployed or on low income
  • between the claimant and their partner, total savings are less than £6,000
  • experiencing high costs for child care
  • suffering from a disability or health condition
  • caring for someone else

The amount of Universal Credit that an individual receives depends on their personal circumstances and income (if any). For instance, someone who is single and younger than 25 years of age will be eligible for Universal Credit amounting to around £257 per month. Meanwhile, this amount will rise to around £509 for someone who is living with a partner and either one of them or both of them are above the age of 25.

How Many Hours Should I Work To Claim Carer’s Allowance?

As a carer, you should be working at least 35 hours per week to be able to claim Carer’s Allowance. This means that as your working hours increase from 20 and above, your chances of eligibility for this benefit also increase.

During 2021-2022, the weekly amount for the carer’s allowance is set at £67.60. You may be able to claim this amount if you are able to fulfil the below conditions:

  • You spend a minimum of 35 hours per week caring for someone
  • You are above 16 years of age 
  • You are not in full-time education 
  • You earn less than or equal to £128 per week (after tax, national insurance and expenses)

Additionally, the person that you are caring for must be on either of the following benefits:

  • Attendance Allowance
  • Armed Forces Independence Payment
  • Disability Living Allowance 
  • Personal Independence Payment 

While the carer’s allowance is below the threshold for income tax deduction; however, when combined with other sources of income of an individual and crossing the personal allowance limit of £12,750, the amount you receive as carer’s allowance is taxable.

It must be noted that if someone’s weekly take-home income is more than £128, they will no longer be eligible for a carer’s allowance. If you are already claiming state pension, you may not be able to qualify for a carer’s allowance.

On the other hand, being eligible for a carer’s allowance will increase the amount you receive via pension credit.

However, if you spend 20 hours or less taking care of someone, you will no longer be eligible for a carer’s allowance. Instead, you will be able to claim the carer’s credits. This is a national insurance credit that helps in filling gaps in your national insurance payments.

What Is Classed As Low Income For Benefits Claim?

Households in the UK are classified as being on low income if they live on less than 60 per cent of the median net disposable income earned. As per recent data gathered and analysed by the Department for Work and Pensions People in low-income households a household with a couple having no children would be considered to be in low income if their annual household income is less than £17,100 BHC (before housing costs) and £14,800 AHC (after housing costs). 

According to a DWP report titled Households below average income: an analysis of the income distribution median income for the term 2019-2020 has been taken as £547 per week. This value serves as the basis for measurement of which income bands fall within the median range and which exceed it. 60 per cent of the median income mark falls at £328 during the last fiscal. This means that any household with a combined income of less than £328 is considered to be on low income.

Conclusion:

On the basis of the above discussion, it appears that while most claimants find themselves financially better off when they work 16 hours or less due to the benefits payments they receive; however it depends on one’s individual situation whether someone is better off working lesser or more number of hours.

FAQs: Is It Better To Work 16 Or 20 Hours?

What benefits can I claim doing 16 hours a week?

If you are working for 16 hours or more per week, you can claim Working Tax Credit or Carer’s Allowance. Claimants of Income Support may need to transfer to a Working Tax Credit claim if they increase their working hours from less than 16 hours per week to 16 hours or more.

Can you get Universal Credit if you work 16 hours a week?

The amount you receive in the form of a Universal Credit claim depend on son certain personal circumstances as well as your income and savings. Universal Credit is not linked to the number of hours that someone works.

How many hours can you work while claiming benefits?

Not all benefits are impacted by the number of hours claimants work. You will not be able to claim Income Support and Job Seekers Allowance if you work for 16 hours or more; while in order to claim a Carer’s Allowance, you should be working at least 35 hours per week.

Will I get more working tax credit if I work fewer hours?

Yes, your claim for Working Tax Credit will reduce as your working hours increase. If you are single and responsible for a child you should work a minimum of 16 hours per week to claim WTC. While couples who are responsible for a child should work at least 24 hours between them. This means that one of them should work at least 16 hours per week. Claimants who are more than 25 years of age must work a minimum of 30 hours per week. 

What is classed as low income?

Households in the UK are classified as being on low income if they live on less than 60 per cent of the median net disposable income earned. Since 60 per cent of the median income mark fell at £328 during 2019-2020, this means that any household with a combined income of less than £328 would be considered to be on low-income during that time.

References:

Better-off-working-less-hours

is it better to work 16hrs or 30 hrs for tax credits

Income Support and working 16 hours a week or more

If you’re working – Gingerbread

How are benefits affected by hours worked? – Turn2us

Working Tax Credit – GOV.UK

Jobseeker’s Allowance (JSA) – GOV.UK (www.gov.uk)

Carer’s Allowance: Effect on other benefits – GOV.UK

What was missing from this post which could have made it better?

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.