HSTM06000 - Help-to-Save account: interaction with tax and other benefits

Tax

The Government bonus is tax-free and does not count as savings income for income tax purposes.

Tax Credits

There is no savings or capital test for tax credit customers so there will be no impact on anyone claiming Tax Credits.

Universal Credit

The Help-to-Save bonus does not count as income for means testing purposes but the bonus and any savings accumulated in the Help-to-Save account will count as capital for the purpose of Universal Credit means-testing.

Universal Credit claimants undergo a capital test, whereby their savings above £6,000 are considered in establishing their income. If a Universal Credit customer’s savings are higher than £6,000 then their Universal Credit award will be tapered. Anyone with a total amount of capital over £16,000 is not eligible for Universal Credit. However, for Tax Credit claimants who have been moved to Universal Credit via a managed migration, any capital in excess of £16,000 will be disregarded for 12 months for eligibility purposes from the point at which they are moved to Universal Credit.

Housing benefit

The Help-to-Save bonus does not count as income for means testing purposes when assessing eligibility for Housing Benefit. The bonus and any savings accumulated will count as capital and would only start to impact on Housing Benefit awards if you have savings of £6,000 or over, including monies in your Help-to-Save account.