1 : 9 - Sources of Financial Protection Flashcards
Understand the range and limitations of state, local authority and other welfare benefits including: State Pension and Pension Credit; housing, rent rebates, mortgage repayment and Council Tax benefits; incapacity, disability, sickness and maternity benefits; social care provision; Universal Credit and other tax credit
What are the 2 forms of Job Seeker’s Allowance (JSA)?
Income-based
&
Contribution-based
What is the age threshold for JSA?
Under the age of 18, JSA is not paid unless there are circumstances that make life very difficult.
Both forms have lower payouts for people between 18 and 24 years old, than for those over 24.
What is the income threshold for JSA?
Income-based JSA is reduced if a person has savings of more than £6,000, and those with over £16,000 are not allowed to receive it at all.
What six existing benefits has Universal Credit replaced?
- Income-Based Jobseeker’s Allowance
- Income-Related Employment and Support Allowance (ESA)
- Income Support
- Working Tax Credit
- Child Tax Credit
- Housing Benefit.
To qualify for Universal Credit a claimant must be:
4
- be 18 or over
- be under State Pension age
- not be in full-time education or training
- not have savings over £16,000 (it is reduced if a person has savings over £6,000 or earns enough money to cover basic living costs)
What state support is offered in the case of loss of income resulting in financial difficulties?
In the case of loss of income resulting in financial difficulties, including being unable to cover mortgage payments, state provision is very limited.
To get even limited mortgage help, the claimant must be eligible for income support or income-based JSA, Pension Credit or income-related employment and support allowance.
What are the qualifying factors?
To qualify, a claimant must be working less than an average of 16 hours a week and earning a low income, and any partner must not be working 24 hours or more a week. Neither can have more than £8,000 in savings.
What is the support scheme called?
Support for Mortgage Interest (SMI)
How much does SMI cover?
It will cover only the interest on the first £200,000 of the debt – and only up to a predetermined rate – regardless of whether the actual mortgage interest rate is higher.
There is no help given towards repaying the capital part of the mortgage debt, or any endowment or other linked savings policy.
What cannot SMI help pay?
- the amount borrowed (only interest on the mortgage is paid)
- anything towards insurance policies linked to the mortgage
- arrears
When assessing the client’s existing cover, what are the 2 types of state benefits to which they may be entitled?
- Potential benefits – benefits which may become payable on certain events such as death, incapacity, or retirement.
- Existing benefits – benefits currently being received.
