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HMRC internal manual

Employment Income Manual

Social security benefits: relationship between jobseeker's allowance and other benefits

If an unemployed person becomes ill and qualifies for incapacity benefit he or she will stop receiving jobseeker’s allowance (JSA) and start receiving incapacity benefit. The Benefit Office or Employment Service Jobcentre will issue a form P45U on termination of the claim to JSA.

Where someone is entitled to two or more benefits at once he or she is entitled to receive whichever amount is the greater. Normally, the benefit that was awarded first continues to be paid and only any balance is received from the second source. The tax consequences are as follows.

No one can qualify for both JSA and income support at the same time:

  • where JSA and another benefit are both due, if the JSA was awarded first it continues to be paid in full and taxed in the normal way. If the other benefit was awarded first, JSA is reduced accordingly and the taxable amount is similarly reduced. Where a woman is entitled to JSA and a widow’s benefit EIM76176 tells you what to do.
  • where income support and another benefit are both due, the other benefit is be paid in full. Most, but not all, social security benefits will be counted as income receivable in the calculation of the amount of income support due.