1.5 Benefits And Tax Credits Flashcards
Which 6 benefits has universal credit replaced?
1) income support
2) income based job seekers allowance
3) income related employment and support allowance
4) working tax credit
5) child tax credit
6) housing benefit
Which benefits remain outside of universal credit?
1) carers allowance
2) contribution based job seekers allowance
3) contribution based employment and support allowance
4) disability living allowance / Personal Independence payment (PIP)
5) child benefit
6) statutory sick pay
7) statutory maternity pay / maternity allowance
8) attendance allowance (for those 65+)
What is working tax credits?
Designed to top up the earnings of those on low incomes. Extra amounts for those households in which someone has a disability or towards the costs of qualifying childcare.
What is income support?
Tax free benefit for those low paid working less than 16 hours a week. Not dependent on having made NICs but is means tested on both income and savings.
What is Jobseeker’s Allowance and what is the difference between income and contribution based jobseekers allowance?
A benefit for the unemployed or those working less than 16 hours per week and actively seeking work.
Income based is being replaced by universal credit
Contribution based, you must have made sufficient class 1 NICs. Paid at fixed rate irrespective of savings or partners earnings for a max of 6 months. Payments made gross and are taxable. Credited with NICs for every week of claim.
What is the support for mortgage interest loan?
Assistance in paying the interest on mortgage (up to £200k) for eligible claimants. Paid directly to lender and is a loan so needs to be repaid on sale or transfer of ownership. Loan is secured to the property as a second charge and is subject to interest.
What is the benefits cap?
A cap on the maximum weekly income that can be received in benefits.
What is the difference between statutory maternity pay and maternity allowance?
Statutory maternity pay paid to employees by employer if have been working continuously for 26 weeks prior to their qualifying week (15th week prior to due date). Payable for 39 weeks and can begin up to 11 weeks before baby is due. Taxable and NICs are due.
Maternity allowance for those unable to claim from an employer. Paid by DWP. Paid at a lower rate but not subject to tax or NICs. Again 39 weeks pay starting at the earliest 11 weeks before due date.
What is child benefit?
Tax free benefit non dependent on NICs.
Available for each child under 16 (up to 19 if in education or approved programme)
Higher rate for first born, lower rate for each child thereafter.
Means tested in form of income tax charge if either parent earns over £50k of 1% for every £100 over. Tax charge equals benefits at £60k
What is child tax credit?
Provides financial assistance to those responsible for a child under 16 (20 if in education or training) whether working or not. Basic amount known as the family element plus Child element (limited to two children if born after 2017). Additional amounts paid for disabled children
What is statutory sick pay?
Paid to employees when off work for 4 days or longer providing earnings are above level at which NICs are payable. Paid for a max of 28 weeks in any spell of sickness. Spells with less than 8 weeks between them are counted as 1. Payments subject to tax and NIC.
What is Employment and support allowance and the difference between income and contribution based?
Contribution based depends on NICs. Not means tested and payments are taxable.
Income based does not depend on NICs. It is means tested but is non taxable.
Assessed via a work capability assessment. If deemed capable of work placed in a work related activity group. Placed in a support group if not capable of work. Different rates of benefits then apply to the two groups.
What is attendance allowance?
This is a benefit for those 65+ who need help with personal care as a result of sickness or a disability. Not means tested and does not depend on NICs.
2 levels - one for daily or nightly care needs and one for both day and night care needs.
What is disability living allowance and what is it being replaced with?
A tax free benefit for those in need of personal care / help in getting around.
It is being replaced by PIP (Personal Independence Payment) for people aged 16-64
2 components - care and mobility
What is carers allowance?
Benefit for those caring for a sick or disabled person. Does not need to be a relative. Not dependent on NICs but is taxable. Can effect other benefits of both the claimant and the person they are caring for.
