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DipFS Unit 3 > 2.2 - The Benefit System > Flashcards

2.2 - The Benefit System Flashcards

1
Q

What two benefits are the UK’s benefit system divided into?

A
  • Contributory benefits

- Non-contributory benefits

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2
Q

What are contributory benefits?

A

Benefits paid to claimants that have paid the required number of NICs

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3
Q

How do employees pay NICs?

A

They are automatically deducted from their salaries by the employer

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4
Q

What are non-contributory benefits?

A

Benefits paid to claimants who have either not paid enough NIC’s to claim contributory benefits or need a top-up payment because the contributory benefits do not meet their income needs

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5
Q

Why did creators of the National Insurance system make it contributory?

A
  • To fund the benefits

- Some would be too proud to accept benefits unless they felt they were fully entitled

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6
Q

Why are benefits paid at a flat rate?

A
  • To keep costs of the system in check

- To avoid problems with means testing

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7
Q

What is a means test?

A

A detailed examination of a persons income

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8
Q

Under what circumstances are means-tested benefits reduced?

A
  • If household income is above a certain level

- If you have more than £6,000 in savings

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9
Q

What is jobseeker’s allowance?

A

The main benefit for those of working age who are not working full time but are able to

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10
Q

Contributory and non-contributory JSA claimants receive the same weekly cash benefit - true or false?

A

True

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11
Q

At what age is a higher JSA rate paid to claimants?

A

25 and over

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12
Q

Requirements to be eligible for contributions-based JSA

A
  • Aged between 18 and retirement age
  • Work less than 16 hours a week
  • Not a full-time student
  • Able to work
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13
Q

Who is income-based JSA available to?

A

Unemployed people who have not paid the required amount of NIC’s

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14
Q

What are the differences between income-based JSA and contributions-based JSA?

A
  • Contributions-based JSA is paid for only six months, income-based JSA does not have a time limit
  • To be eligible for income-based JSA, you must have less than £16,000 in savings and neither you nor your partner should be working more than 24 hours a week on average
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15
Q

Is income-based JSA means-tested?

A

Yes

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16
Q

How can someone previously self-employed claim income-based JSA?

A

By showing that the business is no longer trading

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17
Q

Statutory Sick Pay definition

A

A benefit that provides an income, via the employer, when sickness or disability prevents an individual from working

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18
Q

Your employer has to pay you SSP is you have been off sick for how many days?

A

Four or more

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19
Q

How is SSP paid?

A

At a fixed weekly amount for a maximum of 28 weeks

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20
Q

Employment and support allowance definition

A

A benefit that provides an income directly from the state when sickness or disability prevents you from working.

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21
Q

How can you claim ESA?

A

If you have been getting SSP for the maximum 28 weeks or if you are self employed and the illness/disability prevents you from working

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22
Q

Is ESA contributions-based, non-contributions based or income-based?

A

Contributions-based or income-based

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23
Q

How is ESA paid?

A

At a standard weekly benefit for the first 13 weeks for all claimants aged 25 or over and at a lower rate for those under the age of 25.

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24
Q

What happens after 13 weeks of receiving ESA?

A

Claimants are allocated into the work-related activity group or the support group

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25
Q

Who does the work-related activity group include?

A

Those whose illness or disability is not considered too severe to prevent them from returning to work

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26
Q

Which group do claimants have to attend regular meetings?

A

The work-related activity group

27
Q

Are work-related activity group claimants allowed to work?

A

Part time, no more than 16 hours per week

28
Q

Who does the support group include?

A

Those whose illness or disability seriously limits the work that they can do

29
Q

Are support group claimants allowed to work?

A

Up to 16 hours a week but only with support by the council or voluntary organisation

30
Q

Who is Personal Independence Payment payable to?

A

Those aged 16-64 who have a long-term illness/disability that means they are unable to perform basic daily living activities

31
Q

What do people over 65 claim instead of PIP?

A

Attendance Allowance

32
Q

Who is carer’s allowance paid to?

A

Anyone over 16 who spends 35 hours per week or more looking after someone who has substantial care needs

33
Q

What does the money from disability allowance go towards?

A
  • Home help

- Cleaning services

34
Q

Who is housing benefit paid to?

A

Those with low incomes, either because they are in low-paid work or they are not employed

35
Q

Single people under the age of 35 can only claim Housing Benefit if what?

A

They live in a bedsit or a single room within a house or flat that they share with others

36
Q

What can cause Housing Benefit to be reduced?

A
  • Paying unreasonable high rent to a private landlord
  • In social housing and have more bedrooms than needed
  • Household income is above threshold
  • Savings of more than £6,000
37
Q

What does Support for Mortgage Interest pay for?

A

The interest due on the mortgage and not any capital repayment, insurance policy payments or mortgage arrears.

38
Q

Is there a time limit on SMI?

A

Yes

39
Q

What additional benefits may those eligible for JSA, ESA and/or Housing Benefit be able to claim?

A
  • Council Tax Reduction

- Cold Weather Payments

40
Q

What is Cold Weather Payments?

A

An extra payment of £25 a week to people already receiving benefits when the temperature in the area drops to an average of 0 degrees or below over 7 consecutive days

41
Q

Income support definition

A

A payment designed to provide a safety net for those not eligible for other allowances, to provide money to pay for basic needs.

42
Q

Ways to be eligible for income support:

A
  1. Not eligible for JSA or ESA
  2. Not working or working less than 16 hours a week because:
    - Pregnancy
    - A full-time carer
    - A single parent with a child under the age of 5
43
Q

Basic state pension definition

A

A non-means-tested contributory benefit paid to everyone who has reached state pension age and who has paid sufficient NIC’s

44
Q

How to be eligible for the new state pension

A

Reach retirement on or after 6 April 2016

45
Q

Requirements for state pension

A
  • 10 qualifying years of NIC’s to get any state pension

- 35 years of NIC’s to get full new state pension

46
Q

How does the rate of basic state pension increase each year?

A 
Whichever is highest out of:
- In line with rate of UK inflation
- In line with annual increase in average earnings
- 2.5%
(triple lock guarantee)
47
Q

How many hours is full-time?

A
  • 30 hours per week or more

- 16 hours per week for disabled workers, those over 60 and single parents

48
Q

Who in the couple receives the Working Tax Credit Payment?

A

The partner who works the most hours each week

49
Q

Who in the couple receive the Child Tax Credit payment?

A

The partner who spends the most time caring for the child

50
Q

Statutory Maternity Pay definition

A

A benefit paid to mothers while they are not working before and after their baby is borm

51
Q

How long must an employer pay SMP for?

A

Up to 39 weeks

52
Q

Statutory Paternity Pay definition

A

A benefit payable to fathers to enable them to take time off work to support their partner when a baby is born.

53
Q

How long is SPP paid for?

A

One or two weeks unless the mother returns to work before using the full 39 weeks of maternity leave, in which case the father can take Additional Paternity Leave

54
Q

Benefits cap definition

A

A limit to the total amount in some benefits that working-age people can receive

55
Q

What is the benefit cap for a single person with no children?

A

£350 per week

56
Q

What is the benefit cap for a couple or a lone parent?

A

£500 per week

57
Q

Housing Benefit rules:

A
  • One bedroom for each adult/couple

- Up to two children under the age of 10 must share a bedroom, same applies to same-sex children aged between 10 and 16

58
Q

Purpose of Universal Credit

A

Simplify benefits system by replacing six existing benefits with a single monthly payment for those living on a low income

59
Q

What six benefits are being replaced by Universal Credit?

A
  • Income-based JSA
  • Income-based ESA
  • Income support
  • Housing benefit
  • Child Tax Credit
  • Working Tax Credit
60
Q

Is Universal Credit means-tested?

A

Yes

61
Q

What is the triple lock guarantee designed for?

A

To ensure that state pension stays the same in real terms from year to year

62
Q

An additional tax charge will be payable by those in receipt of Child Benefit whose earnings exceed:

A

£50,000 a year

63
Q

Purpose of MAT

A

To help people across the UK to tackle their debts and manage their money wisely.

DipFS Unit 3 (39 decks)

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