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Working out your disposable income and disposable capital
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Updated 12 August 2008
Working out your disposable income
Step one
Add together your gross monthly income from:- benefits and tax credits, but do not include:
- Housing Benefit and Council Tax Benefit;
- Disability Living Allowance;
- Attendance Allowance;
- Carer's Allowance;
- War and War Widows Pensions;
- Severe Disablement Allowance;
- Exceptionally Severe Disablement Allowance (part of Industrial
Injuries Disablement Benefit);
- Community Care Direct Payments from social services;
- the amount of Fostering Allowance that is more than £190.67
per month for each dependent child; and
- payments made under the Earnings Top-up Scheme;
- gross earnings or profits from business (before deductions);
- any maintenance payments;
- pensions;
- student grants and loans;
- income from savings and investments;
- dividends from shares; and
- monies received from relatives or friends.
Step two
Add together the following monthly amounts:- your Income Tax and National Insurance contributions;
- any payments you make for childcare (if it is to enable you to go to work);
- maintenance payments you are making;
- £45, if you receive a salary or wage;
- housing costs, for example rent (less any Housing Benefit) or mortgage payments, endowment policy premiums (if in connection with mortgage), or, if you are not a tenant or owner-occupier, the actual costs of your accommodation (these must be considered to be ‘reasonable'); and
- an allowance of £228.52 per month for each dependent child.
Step three
Deduct the Step two amount from the Step one amount - this is the amount of your monthly disposable income. When looking at your income, the figure used to work out your entitlement is the amount you received in the last calendar month up to the day you apply. If your income changes from month to month, you can delay your application as long as you are not deliberately depriving yourself of income. If you need legal help in the mean time, you will have to pay for the costs.
Working out your disposable capital
The following are counted as capital:- bank, Post Office and building society savings, premium and income bonds and National Savings certificates;
- stocks, shares and other investments;
- the value of property or land that is not your home;
- the equity value of your home that is more than £100,000 (this is worked out by deducting the amount of the outstanding mortgage up to £100,000 from the value of the property; if this amount is more than £100,000, the excess is counted as capital);
- the money value of valuable items, for example jewellery;
- money from an estate or trust fund;
- money owing to you; and
- money that can be borrowed against business assets or the surrender value of insurance policies.
Add these amounts together - this is the amount of your disposable capital.
If the case is to resolve a dispute about any of the property listed above, it will not be counted as part of your disposable capital. However, for Legal Representation (non-immigration cases) and General Family Help, this is limited to £100,000.
Next page: Further help and information
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