3 - State Benefits Flashcards
Bereavement Support
New system name
What you receive
Tax
Impact of age and moving in with somebody else
Bereavement Support Payment
If you have kids you get £3,500 lump sum and £400 per month for 18 months
No kids you get £2,500 and £100 per month for 18 months
Paid tax free
Age is irrelevant and you still get it if you move in with somebody else
YOU NEED TO BE MARRIED/CIVIL PARTNER (not just a partner)!
Bereavement Support
Old system
Widowed Parents Allowance and Bereavement Allowance
Income-related benefits
General means testing rule for income benefits
Can’t have more than £16k capital.
Benefits reduced by £1 per week for every £250 you’ve got above £6k.
Income -related benefits
4 types
Tax treatment
- Income support
- Job-seekers allowance
- Statutory sick pay
- Employment and Support Allowance (ESA)
These amounts are generally taxable just like regular income
Income Support
What is it and who is it for?
It’s an income top-up for people between 16 and state pension age.
Can’t get it if you’re studying full time, working over 16 hours a week or receiving either jobseekers allowance or ESA
Jobseekers Allowance
What is it?
What is the contribution based version?
Jobseekers allowance is support for people who are fit to work and actively looking for jobs (you need to prove that you’re actively looking).
Contributions based requries a certain level of NICs and is only available for 6 months.
Statutory Sick Pay
What is it?
If you’re off work for 4 or more days this is the minimum that your employer has to pay you (government cover this minimum amount).
Employment Support Allowance (ESA)
What is it?
2 types
2 phases
ESA is paid to people out of work due to sickness or illness with the intention of helping them get back to work.
2 types are contributions based (need to have paid NICs but not means tested) and income based (no NIC requirement but means tested).
There is an assessment period initially then a main phase.
Disability Benefits
4 types
Tax treatment
- Personal Independence Payment (replacement for DLA, income for disabled people aged 16 to 65)
- Disability Living Allowance (old version of PIP, some people still claiming though)
- Attendance Allowance (for people over 65 who are disabled)
- Carers Allowance (given to carers)
Carers allowance is taxable but payment for disability is not.
Child Benefit
Impact of means testing
Child benefit always gets paid for all kids up to 16 (or 20 in full time eduction).
However it the highest earning parent earns over £50k they get hit with an extra tax to claw some of the benefit back.
The tax is 1% of the amount of child benefit for every £100 you earn over £50k (so if you earn £60k, 100% of the child benefit amount gets taken back off you as tax!)
Tax Credits
What are they?
2 types
Tax credits are currently payable by HMRC.
- Child tax credit (cash each year for number of kids you’ve got, targeted at the first 2, additional payment for a disabled child)
- Working tax credit (top up of income for those with low earnings and no kids)
Housing related benefits
2 types
- Housing benefit (to help with rent payments for people in certain circumstances, limited amount dependent on where you live)
- Support for mortgage interest (extra help for people receiving other benefits such as jobseekers, with lots of restrictions - only interest payments, on £200k max, nothing for first 39 weeks (75% of a year), nothing if you’ve got over £16k savings)
Universal Credit
What is it?
This is the new system which will replace all the old benefits.
Subject to an overall “benefits cap” which is a weekly max anybody can be paid, higher in London.
It’s slowly being introduced but not really implemented yet.
State Pension
Requirements to receive in full
Means testing?
You need 35 full years of NICs to get the full single level state pension.
No means testing, everybody gets it.
State Pension
What is the new state pension age?
Moving towards 65 for both men and women (used to be only 60 for women) by 2018.
Then rising to 66 in 2020 and higher in future years.
