EIM76190 - Social security benefits: income support: summary

Part 10 Chapters 3 and 4 ITEPA 2003

Income support (IS) is a means tested benefit for people who are not registered as unemployed and looking for a job. The amount payable is the difference between the claimant's net weekly income and the amount required to meet his or her needs calculated according to the IS rule. The payment of IS does not depend on a person's National Insurance contribution record and:

  • IS is only paid to people who do not sign on as unemployed. This IS is not taxable.
  • anyone who has to sign on as unemployed and is looking for work does not receive IS, he or she receives Jobseeker's allowance (JSA) instead. JSA is taxable (see EIM76220).
  • a back to work bonus is paid if certain conditions are met. This bonus is not taxable (see EIM76223).

Income support paid during strikes

IS payable to some strikers or people interested in a trade dispute is taxable. Payments are made by the Benefits Agency and not through the National Unemployment Benefits System. Strikers are not entitled to JSA (see EIM76223).

A single person cannot receive taxable benefit while on strike. A striker who is either married or are in a civil partnership or living with someone as husband or wife or civil partner, may receive benefit for his or her partner. This amount is taxable under the method described below.

In theory there are two categories of taxable claimant:

  • married or unmarried couples or civil partners where at least one partner is 18 or over. The taxable limit is one-half of the IS personal allowance for this age group (IS personal allowance has nothing to do with income tax personal allowances).
  • married or unmarried couples or civil partners where both partners under 18. The taxable limit is one-half of the IS personal allowance for this age group.

It has been rare for a couple under 18 to get IS since September 1988.

Reporting Income Support

The Benefits Agency adds up the weekly amounts of taxable benefit and benefit paid. These figures are notified to the Inland Revenue on form P181 when the strike is over. Income tax is not deducted from payments of benefit.

Regarding the procedure for taxing this IS, see EP8655 onwards. The suspension of tax refunds during a trade dispute is dealt with at EP1305.