Means Tested Benefits

Means tested benefits are not affected by National Insurance Contributions; they are affected by your capital and income.


List of Means Tested Benefits:

  • Council Tax Benefit
  • Education Benefits i.e. free school meals
  • Employment and Support Allowance (ESA) (income based)
  • Health Benefits
  • Housing Benefit
  • Income Support
  • Jobseekers Allowance (JSA) (income based)
  • Pension Credit
  • Social Fund
  • Tax Credits (Child Tax and Working Tax Credits)


How some Means Tested Benefits are calculated generally: 

Step1: Qualifying conditions

Each benefit has its own eligibility criteria; see for benefit entitlement.


Step 2: Capital Rules

All are affected by any capital you have although the higher and lower limits vary depending upon which benefit you are claiming. But in all circumstances:

  • If you have capital (including savings) above the higher limit then you are not entitled to the above benefits
  • Capital below the lower limit is ignored
  • Capital between the higher and lower limits produces “tariff income” and will be used as part of benefit entitlement calculation

Eg: If higher limit is £3,000 and lower limit is £1,500 this would then calculate as £6 income for benefit calculation; for each £250 between limits, £1 is added to your income.


Step 3: The calculation

For most benefits this involves comparing your income with the amount which the Department of Work and Pensions (DWP) sets as applicable amounts for you and your family’s benefit entitlement; see for further information.