Benefits – Social Care – Disability Related Expenses

Why might it be of interest?

It often comes as a surprise to parents that a young person on benefits may have to make a contribution towards their care package.  However, it is allowable and as far as we know pretty much every local authority make this charge.

There are thresholds, some of which are the same for everyone and some of which will vary between individuals.  Knowing the amount of benefit your young person might receive and the allowances they can set against their benefits income will help you understand how much of a contribution they will be making.

There are further documents on the information hub with more details about specific topics which I will link where relevant.

Thresholds

Let’s start by looking at the benefits thresholds for Universal Credit and adult social care as these are the same for everyone and determine your eligibility for the benefit.

Both have upper thresholds – and if you have savings/assets over this amount you are not entitled to the benefit; and lower thresholds – if your savings/assets are below the lower threshold these are disregarded.

If you have savings or assets between the lower and upper thresholds you are entitled to the benefit but a taper will apply.  What that means is that you will lose some of the benefit but not the full amount.

These figures are based on 2026/2027 figures.

Adult Social Care

Upper capital limit:   £23,259

Lower capital limit:   £14,250

Taper: a person with assets between the thresholds will pay what they can afford from their income plus £1 per week for every £250 they have above the lower threshold.

Universal Credit

Upper threshold:     £16,000

Lower threshold:     £6,000

Taper:  a person with savings between the thresholds will be deemed to have an income of £4.35 per month for every £250 or part above the lower threshold

Work allowance for people with a limited capability for work:  if you have a limited capability for work you can earn a certain amount of money each month before your UC will be affected.

Work Allowance for 2026/2027:

£427 per month if your UC includes help with housing costs

£710 per month if your UC does NOT include help with housing costs (this includes those living in supported housing or getting housing benefit separately)

If you earn UP TO your work allowance your UC is not reduced

If you earn OVER your work allowance your UC is reduced by 55p for every £1 you earn – so you will receive 45p in every pound for earnings over your work allowance.

If you don’t have a limited capability for work your UC starts to reduce from the very first £1 of income.

UC rates for 2026/2027 (rounded figures):

Standard element for under 25s:  £338

Standard element for over 25s:    £425

LCWRA element:                        £430

(this is reducing to about £200 for new claimants from April 2026)

Let’s have a look at a couple of examples where young people work (using round figures!) and how their benefits might be affected if they earn money:

• You live at home and don’t receive any help with rent
• You are 24 and receive the standard element of UC: £338 pcm
• You have a part-time job and earn £90 per week
• Over a year that amounts to £390 pcm
• Your work allowance is £710 pcm
• Your UC payment is not affected
• You have your own flat and get help with the rent through the housing element of UC
• You are 26 and receive the standard element of UC – £425 – plus the LCWRA element of £430 – total UC income £855pcm
• You work 25 hours a week earning about £200 a week
• Over a year that amounts to £866pcm
• Your work allowance is £427
• You have earned £439 over your work allowance
• Your UC will be reduced by £240 (£439 x 0.55)

When working out what your monthly income is from earnings you need to multiply your weekly income by 52 then divide by 12 to get the monthly income – this is because UC is usually paid monthly and that’s the amount calculations are based on.

There is an upper earnings limit.  If you earn about £2,500 over your work allowance you will get no UC.  This seems like a lot but I can’t find any other figures.  I don’t think many of our young people will be affected by the upper earnings limit but they may earn enough on a monthly basis to see their UC being reduced.

You won’t get any UC payments until your earnings go under the upper earnings limit.  If your wages reduce enough within 5 months your UC payment will restart automatically.  If it’s more than 5 months you will have to reapply.

It should be noted that the housing element of UC and rent paid by Housing Benefit for those in supported living are also means tested and could be affected by earnings.

There are nuances here so I recommend you get advice from a benefits advisor if you don’t understand your payments.

PIP

PIP is not means tested so your savings/assets/earnings do not affect the amount you receive.

However, you must declare that you receive PIP when making an application for UC and the daily living component is taken into account for the Adult Social Care financial assessment (but not the mobility component).

The rates for 2026/2027 are (rounded figures):

Enhanced daily living:        £115

Standard daily living:          £77

Enhanced mobility:            £80

Standard mobility:             £30

Money you are allowed to keep before making a social care contribution

https://ruils.co.uk/article/minimum-income-guarantee/

https://ruils.co.uk/article/2025-2026-benefit-and-minimum-income-guarantee-rates/

While the adult social care financial assessment considers your savings and assets to determine whether the LA will pay for your care (or not) it disregards earned income (it may take into account income from other sources).  So, whether you have to make a contribution towards your package or not is based on income from benefits.  This includes UC and PIP.

The Minimum Income Guarantee (MIG) is the income the government says you should keep to cover personal expenditure such as food and toiletries, utility bills, clothing and personal spending, entertainment, etc.

The government sets a Minimum Income Guarantee (MIG) each year.   This is not a single figure – there are variations depending on age and additional premiums for people with disabilities.   These are the relevant figures for 2026/2027:

Under 25:               £95

Over 25:                 £120

 

There are 2 disability premiums:

Disability premium:                      £51

Enhanced disability premium:      £25

Disability premium:  you get this allowance if you are, or the LA considers you would be, in receipt of income support (now a legacy benefit but paid to people on a low or no income, under £16K savings, not in full-time paid work, unable to work due to health or disability).

Enhanced disability premium:  you get this allowance if you are in receipt of PIP enhanced daily living component or DLA high rate care.

Remember, these are allowances to set against your benefits income – you do not actually receive this money.  So, an individual’s MIG is not a single figure.

Here’s some likely scenarios for allowances for our young people:

Young person under 25 in receipt of enhanced daily living PIP:

Single person’s allowance:           £95

Enhanced disability premium:      £25

Disability premium:                      £51

 

Their MIG would be:          £171

 

Young person under 25 not receiving enhanced daily living PIP:

Single person’s allowance:           £95

Disability premium:                      £51

 

Their MIG would be:          £146

 

Young person over 25 in receipt of enhanced daily living PIP:

Single person’s allowance:           £120

Enhanced disability premium:      £25

Disability premium:                      £51

 

Their MIG would be:          £196

 

Young person over 25 not receiving enhanced daily living PIP:

Single person’s allowance:           £120

Disability premium:                      £51

 

Their MIG would be:          £171

 

This is only really relevant if the young person is also in receipt of a care package from adult social care.  Their MIG would be the minimum amount of their benefits they would be keeping before making a contribution towards their care package.

The amount of the contribution depends on how much they receive in benefits each week.  This will involve working out the annual amount of each benefit and then dividing by 52.  UC is usually paid monthly, but PIP is 4 weekly!

Here’s a couple of examples:

Under 25 in receipt of PIP and standard element of UC:

PIP:              £120

UC:              £78

Total:            £198

 

MIG:             £171

Contribution: £27

 

Over 25 in receipt of PIP, standard element of UC and LCWRA element of UC:

PIP:              £120

UC:              £98

LCWRA:       £99

Total:            £317

 

MIG:             £196

Contribution: £121

 

Yes, the amount of the contribution can look like a lot.  However, there are potentially other allowances to set against a young person’s benefits before they make the contribution.

I’m making up a term here – Personal Income Guarantee – or PIG!  This is to differentiate from the government minimum income guarantee as a young person’s actual allowances can be much higher if they have additional allowances.

What might these allowances be?  Basically, amounts that the LA disregards or disability related expenses (DRE).

So, a young person’s PIG would be made up of:  their MIG + LA disregards + DRE.  If either, or both, the LA disregards and / or DRE apply then a young person’s PIG could be significantly higher than the government MIG and therefore their contribution towards their care package would be that much lower.

LA Disregards

These are things that the LA will disregard.  This list is not exhaustive, simply illustratory:

• Housing costs not covered by the housing element of UC or housing benefit
• Council tax
• Some bills such as water and gas
• Rent you charge your young person (who lives at home)

DRE is not technically a disregard but the amount that the LA accepts for DRE is then added to the MIG along with any disregards to come up with the amount the young person keeps from their benefits before making a contribution towards their care package.

• The LA may have an automatic DRE allowance – LB Richmond allows £20 per week without any evidence
• Disability Related Expenditure – these are costs you have because of your disability that a non-disabled person would not have (you will need to evidence)

If your LA has an automatic DRE allowance you will not have to evidence any DRE below this amount.  Most do not have an automatic allowance or it’s very low.

If your LA does not have an automatic DRE allowance or your disability related expenses are more than the allowance then you can make a case to have these costs added to your allowances – but you will have to provide evidence (receipts, invoices, you may need to provide evidence of need).

The cost must be reasonable and verifiable and if there is a lower cost / free version you will have to demonstrate that it is not suitable – or just accept the lower cost even if you decide to go with your more expensive version.

Disability Related Expenses – or Expenditure

A DRE is a cost you incur because of your disability – a non-disabled person would not have this cost.  It means costs in addition to – or over and above – what the general population would pay.

Local authorities cannot deny DRE but some will try.  Be prepared with your evidence.  Make use of the Inclusion London DRE app which will guide you through the process and even write the letter to the LA for you:  https://www.inclusionlondon.org.uk/chat-bot/

The app will help you consider all the areas where you might have DRE.   There’s likely to be more than you think.

Rather than repeat it all here have a look at the article on the information hub about DRE:  https://ruils.co.uk/article/dre-costs-to-offset-against-contribution/

 

One thing to mention here as it’s not in the linked article is that your young person can pay their way in your household if living at home.  You could call it rent or a contribution towards bills, household expenses, recognition of the care and support you provide.  LAs will like to tell you that this cost is not an allowable expense but it is.  Ideally, you will draw up a lodger agreement:  https://ruils.co.uk/article/dre-costs-to-offset-against-contribution/ and the young person must make the payments agreed – you will have to evidence this.  Further information in the linked document and a link to the information on the Down’s Syndrome Association website.

 

Personal Expenses Allowance (PEA)

If your young person lives in a residential home none of the above figures apply.  Basically, if the LA is funding the placement they will require the young person to pay almost all of their benefits to the LA bar a personal expenses allowance, which in 2026/2027 amounts to £31.80 per week.

The local authority can allow a young person to keep more of their benefits so you may want to consider any disability related expenses that are not covered by the residential setting.  Anything provided by the home cannot also be claimed as a disability related expense.