Divorce and State Benefits
Divorce and State Benefits: What you need to know
Disclaimer: I am an accredited mediator - not a qualified lawyer or state benefits expert. The information in this article is to simply explain issues impacted by divorce and separation. You should not treat this information as legal or benefits advice. It is always advisable to take full advice on your particular circumstances from your solicitor or a benefits expert.
Please note that this post was written in January 2021 and will not be up-dated. The rules relating to state benefits change rapidly, so you will need to make your own enquiries as to accuracy.
For many of my clients coming into mediation, divorce is the first time that they have had to consider the state benefits to which they are entitled. It can be confusing to work out what you might be entitled to and how to go about making a claim. The confusion is made harder when you have not yet worked out the details of your financial agreement.
This blog post aims to highlight the main benefits that might be relevant to divorcing couples and the best sources of information.
The main state benefits relevant to divorcing couples are:
- Child benefit
- Council tax reduction and
- Universal credit
Others may also be relevant, depending on your circumstances.
A good starting point to find out which might be relevant for you are the following benefit calculators:
Further Information on your circumstances
For further information on benefits applied to your specific circumstances, try the following:
Citizens Advice https://www.citizensadvice.org.uk/benefits/
The Money Advice Service https://www.moneyadviceservice.org.uk/en/categories/benefits
If you want to speak to someone for help, try the following:
The following are the most likely benefits to be discussed in mediation, with a few comments on issues that may be relevant to the mediation process.
Most parents are already aware of child benefit and many are already in receipt. Child benefit is a non-means tested benefit paid to parents for children they look after who are under 16, or older if still in full time education. If you or your partner earns more than £50,000pa there are tax implication of receiving child benefit.
You will not be entitled to child benefit at all if you or your partner earns more than £60,000. On divorce or separation you may become entitled to child benefit when you weren’t previously due to your ex’s earnings. But bear in mind that a new partner’s earnings may now be taken into account.
Child benefit can only be paid to one parent for one child. Where there are two children, parents can elect to each receive the benefit for one child. Child benefit for one child cannot be divided between two parents.
For more information on child benefit click here https://www.gov.uk/topic/benefits-credits/child-benefit
Council tax discount
You can get 25 per cent off your council tax bill if you’re the only adult over 18 living in your home. This is called 'council tax discount'. It will apply to most couples who separate, leaving just one parent and their children living in the family home. To apply, contact your local council.
If you are on a low income, you may also be able to get council tax reduction from your local council. Each council runs its own council tax reduction scheme and they will be able to tell you more.
Universal Credit is a relatively new benefit to support you if you’re working and on a low income or you’re out of work. In order to receive Universal Credit, you will need to meet some basic conditions relating to age, residence, studying, work commitment and capital held.
For most people, Universal credit has replaced several older benefits, including child tax credits and working credits. If you are currently claiming child tax credits or working tax credits, then take advice before making a Universal Credit application because once you have applied for Universal Credit, you cannot return to child tax credits or working tax credits, if you were receiving them.
One of the conditions you need to meet is that you cannot claim universal credit if you have capital above £16,000. However, the value of your home is disregarded from this amount if you continue to live in it. The home may also be disregarded for a period of time if you have moved out of it as part of the divorce process – take further advice if this applies to you.
If you have savings of more than £6000 but less than £16,000, then you may be entitled to Universal Credit, but these savings will be taken into account in the calculation.
The payment of child maintenance is not taken into account in the Universal Credit calculation, but the payment of spousal maintenance is.
The helplines given above are very helpful for questions relating to Universal Credit.
Citizens Advice also offers a ‘Help to Claim’ service for Universal Credit https://www.citizensadvice.org.uk/about-us/contact-us/contact-us/help-to-claim/
If you come into mediation, we will consider your benefits as part of the mediation process. For more information about mediation, please contact me firstname.lastname@example.org or on 07706 513496.