Guide
The income route, and the after-housing-costs test
Pathway 3 has two halves. The first is a simple income limit. The second, the after-housing-costs test, exists for households who earn more than that limit but are left with little once the rent or mortgage is paid. It's the least understood route, and for some Liverpool households the one that works.
Where you stand
A household qualifies on income if its gross annual income is below about £36,000. If it's higher, it may still qualify if its income after tax and after rent or mortgage payments is below a threshold set for its size, from £20,000 for one or two adults upwards.
The first half
The £36,000 limit
GOV.UK says household income must usually be £36,000 a year or less. Liverpool City Council's page says gross annual income below £36,000, and the Combined Authority describes it as combined annual income before tax. In practice: add up everyone's income before tax, and if it's under £36,000, the household meets pathway 3.
"Household" means the people living in the home, not just the applicant. If you're close to the line, ask the council how it treats particular kinds of income before you register.
The second half
After housing costs
The government's guidance to councils explains the idea. Household size and make-up affect how much income leaves a household at risk of fuel poverty. So councils may include households above £36,000 if their after-housing-costs income is below the threshold for their size.
After-housing-costs income, in the guidance's words, is what a household is left with after tax and after rent or mortgage payments. Council tax, energy bills and ground rent aren't deducted. Liverpool's page describes the starting point as gross income; the government's guidance and the Combined Authority's page both say net, after tax. If your case turns on it, ask the council which it applies.
One adult
Thresholds for one-adult households
| Household | Maximum |
|---|---|
| 1 adult | £20,000 |
| 1 adult + 1 dependant | £20,000 |
| 1 adult + 2 dependants | £20,000 |
| 1 adult + 3 dependants | £23,600 |
| 1 adult + 4 dependants | £27,600 |
| 1 adult + 5 dependants | £31,600 |
Two adults
Thresholds for two-adult households
| Household | Maximum |
|---|---|
| 2 adults | £20,000 |
| 2 adults + 1 dependant | £24,000 |
| 2 adults + 2 dependants | £28,000 |
| 2 adults + 3 dependants | £32,000 |
| 2 adults + 4 dependants | £36,000 |
| 2 adults + 5 dependants | £40,000 |
An illustration
How the sum works
Take a made-up household of two adults and two children with combined income before tax of £40,000. That's over the £36,000 limit, so the first half of pathway 3 doesn't apply. Suppose their income after tax is £33,000 and their mortgage costs £7,200 a year. After housing costs, they have £25,800. The threshold for two adults and two dependants is £28,000, so on these figures they would meet the test.
Now the same family with a mortgage of £4,000 a year: after housing costs they have £29,000, above £28,000, so they wouldn't. These are illustrations only. The council does the real calculation, on evidence, and your own figures will differ.
What's left out
Income that doesn't count
The Combined Authority's page says that income from certain non-means-tested benefits is excluded from household income calculations. It lists Attendance Allowance, Disability Living Allowance, Personal Independence Payment, Armed Forces Independence Payment, Exceptionally Severe Disablement Allowance, Constant Attendance Allowance and Industrial Injuries Disablement Benefit. Those benefits don't qualify a household on their own, but leaving them out of income can bring a household under a threshold.
Evidence
What you'll need to show
The government's guidance is firm that self-declarations aren't acceptable: councils must carry out robust checks. Liverpool City Council says its engagement officer may ask for financial information to verify household income. Have ready recent payslips or pension statements for everyone whose income counts, benefit award letters, and, for the after-housing-costs test, your rent statement or mortgage statement.
Other routes
If you're over the threshold
Check the other two pathways: an eligible postcode ignores income altogether, and a qualifying means-tested benefit is enough on its own. If none fits, paying yourself is the route: zero VAT on installation until 31 March 2027 and a Warm Homes loan for homeowners. See paying yourself.
Why it exists
A test built around housing costs
The after-housing-costs test recognises something Liverpool renters and mortgage-holders know: a salary that looks comfortable can leave little once housing is paid for. The thresholds are set by household size because a family of six needs more to stay warm than a single person. If your household is large, or your rent or mortgage is high relative to income, it's worth working through the sum before assuming you're over the limit.
Larger households
Households the tables don't cover
The government's tables run up to five dependants, with one or two adults. If your household is larger, or has three or more adults, such as grown-up children living at home, ask the council how it applies the test. Councils run the checks, and they can explain how your household is counted before you gather paperwork.
Income test questions
Is the £36,000 before or after tax?
Before tax. GOV.UK says household income must usually be £36,000 a year or less; the Combined Authority describes it as combined annual income before tax below £36,000.
What counts as housing costs?
Rent or mortgage payments. The government’s guidance says housing costs don’t include council tax, energy bills or ground rent.
Do disability benefits count as income?
The Combined Authority says income from non-means-tested benefits such as Personal Independence Payment, Disability Living Allowance and Attendance Allowance is excluded from household income calculations.
Can I just tell the council my income?
No. The government’s guidance says self-declarations aren’t acceptable; councils must check evidence such as payslips or benefit letters.
Sources for this page
- DESNZ › Warm Homes: Local Grant policy guidance for local authorities, July 2026 (PDF), read 4 November 2026
- Liverpool City Council › Apply for a Warm Homes Local Grant, read 3 November 2026
- Liverpool City Region Combined Authority › Warm Homes Local Grant, read 3 November 2026
- GOV.UK › Apply for the Warm Homes: Local Grant to improve a home, read 3 November 2026
- HMRC › VAT Notice 708/6, energy-saving materials and heating equipment, read 3 November 2026
- GOV.UK › Warm Homes loan: eligibility, read 3 November 2026
A question about solar funding in Liverpool?
Tell us what you're trying to find out. Your message reaches SEO-DONS LTD, which publishes this guide, and we answer by email. We don't run any grant scheme, decide eligibility or install panels, but we can point you to the scheme and the council that does.
What happens next
- Your message reaches SEO-DONS LTD, publisher of this guide.
- We answer by email, pointing to the scheme or council that applies.
- Any application is made to the council or scheme itself.