3. State protection provision

Question 1

What is the assessment of income for state benefits? (4)

Answer 1

Total income less:
- rent (less housing benefit) or mortgage interest
- 80% of council tax
- income tax & NI
- 50% of occupational/personal pensions conts

Question 2

What is included in the assessment of savings for state benefits?

Answer 2

• bank accounts
• NS&I products
• gilts, shares, unit trusts, investment trusts

Personal possessions excluded

Question 3

What is the savings threshold for state benefits?

Answer 3

<£6k full entitlement
£6k - £16k tapered down
>£16k no entitlement

Question 4

What are the criteria to claim JSA? (3)
What is the tax treatment of benefits? (2)

Answer 4

Aged 18 - SPA
Unemployed and actively seeking work OR
Working <16hrs per week on average

JSA income is taxable
Claimants receive NIC credits

Question 5

Describe the following types of JSA:
New Style (4)
Contribution-based
Income-based

Answer 5

New Style:
- dependent on having paid sufficient Class 1 NICs
- fixed rate regardless of savings or partner’s earnings
- no additional payments for dependents
- payable for up to 182 days

Contribution-based:
Same as New Style but also need to have been entitled to the severe disability premium

Income-based:
Replaced by Universal Credit

Question 6

What are the criteria for claiming New Style JSA? (6)

Answer 6

• Previously worked as employee
• Paid Class 1 NICs in last 2-3 years
• Capable, seeking & available for 40hrs /wk work
• Out of work or working <16hrs /wk
• Not in FT education
• Signed Jobseeker’s Agreement

Question 7

Statutory Maternity:
- Criteria (2)
- Payment period
- Payment amount (2)
- Tax treatment

Answer 7

Criteria:
- worked for employer for 26 weeks up to 15th week before baby is due
- average earnings above LEL

Payable for 39 weeks, starting up to 11 weeks before due date

Paid 90% average weekly earnings for first 6 weeks, then lower standard rate thereafter

Taxable & subject to NI

Question 8

Statutory Paternity:
- Criteria (4)
- Payment period

Answer 8

Criteria:
- biological father, adopter or spouse of mother/adopter
- employed for 26 weeks up to 15th week before due date or when matched with child
- continue to work for employer until birth or adoption
- earnings above LEL

Payable for 2 weeks

Question 9

Maternity Allowance:
- Criteria (3)
- Payment period
- Payment amount (2)
- Tax treatment

Answer 9

Criteria:
- employed or self-employed for 26 weeks out of the 66 weeks before due date
- meet minimum earnings threshold
- not entitled to SMP

Paid for 39 weeks directly from DWP

Paid 90% earnings if between min and LEL
If earnings > LEL then standard rate

Tax-free

Question 10

Statutory Adoption Pay:
- Criteria (2)
- Payment period
- Payment amount (2)
- Tax treatment

Answer 10

Criteria:
- been notified of matching with child
- employed for 26 weeks before notification

Paid for 39 weeks

Paid 90% average weekly earnings for first 6 weeks, then lower standard rate thereafter

Taxable & subject to NI

Question 11

Shared Parental Leave feature & criteria (3)

Answer 11

Enables 50 weeks to be shared, 37 of which paid (39 minus 2 weeks paternity)

One parent employed >26 weeks by 15th week before due date
Other parent worked for 26 weeks in 66 weeks preceding due date/notification of matching
- earned >£390 in total for 13 of those weeks

Question 12

Statutory Shared Parental Pay feature, criteria (2), payment amount

Answer 12

Enables 37 weeks to be shared

Criteria:
- employee eligible for SMP or SAP OR
- eligible for SPP and partner eligible for SMP, MA or SAP

Paid at lower of statutory amount and 90% earnings

Question 13

Child Benefit key features (2) & tax treatment (3)

Answer 13

Payable for children from birth to 16yo
Higher rate for firstborn, lower for each subsequent

Tax treatment based on adjusted net income of any person in household:
<£50k; tax free
£50k - £60k; income tax charge at 1% for every £100 earned above £50k
>£60k; benefit paid but 100% tax charge

Question 14

Working Tax Credit feature & basic adult element criteria (3+4)

Answer 14

Payment to top up low pay

Criteria:
- paid
- expect to work for 4+ weeks
- aged 16+
ANY OF:
- parent/guardian or disabled working >16hrs /wk
- parent/guardian and claimant or partner works >16 hrs /wk and >24hrs jointly
- aged 25-59 working >30hrs /wk
- aged 60+ working >16hrs /wk

Question 15

Working Tax Credit additional elements (5)

Answer 15

• single parent
• second adult, if claiming jointly with partner
• age >25 working >30hrs /wk
• (severe) disability
• childcare; paid to carer

Question 16

Child Tax Credit criteria (2) & elements (4)
Rules for new claimants (2)

Answer 16

Criteria:
Children living with claimant up to 31 Aug following 16th birthday or <20yo in FT education
Claiming WTC

Elements:
Family; basic amount per household
Child; additional amount per child
Baby; higher rate for <1yo
Disabled child

New claimants; no family element & child element capped at 2

Question 17

Statutory Sick Pay
Criteria (3)
Payment period (2)
Tax treatment

Answer 17

Criteria:
- employee off work for 4+ days
- earning >£123/ wk pre-tax
- told employer of sickness within internal timeframe or 7 days

Paid for 28 days per spell excl first 3 “waiting days”
- spells <8 weeks apart are counted as one spell

Subject to tax & NI

Question 18

Incapacity Benefit key features (3)

Answer 18

Closed to new claimants - moved to JSA or ESA
Claimed for those ineligible for SSP e.g self employed
Need to have paid sufficient Class 1/3 NICs

Question 19

Employment & Support Allowance
Criteria (5)
Phases (2+2)

Answer 19

Criteria:
- aged 16-SPA
- worked as employee or self-employed, but no longer
- paid sufficient NICs
- not claiming JSA
- not have previously had SSP which has now stopped

Assessment phase; 13 weeks - basic rate
Main phase; from week 14 placed in either group:
- work-related activity; take part in work focused interviews etc. - receive additional component for 1yr
- support; illness/disability preventing work - receive additional component indefinitely

Question 20

Attendance Allowance key features (3)

Answer 20

Reached SPA and need personal care
Not means tested or dependent on NICs
Higher rate if care needed day + night

Question 21

Personal Independence Payment key features (2+2)

Answer 21

Replaced Disability Living Allowance

2 components:
- daily living; 10 activities tested
- mobility; 2 activities tested

Question 22

Universal Credit key features (4) & additional elements (4)

Answer 22

Claimed per household
Means-tested on all household members
Phased from 2013, still ongoing
Single basic allowance paid monthly

Additional elements for:
- carers
- (disabled) children
- housing/childcare costs
- limited capability for work

Question 23

Bereavement Support Payment key features (4)

Answer 23

Lump sum + income tax-free for up to 18 months
Higher amount if have children <20 in FT education
Claim within 3 months of spouse’s death for full payment, tapered down if claimed up to 21 months
Deceased had to have paid sufficient NICs

Question 24

Support for Mortgage Interest
Key features (3)
Eligible benefits (5), waiting periods and max periods

Answer 24

Loan to cover interest on up to £200k mortgage
Paid directly to lender
Calculated at standard interest rate (not actual product rate)

Payable if in receipt of / waiting period / max period:
Income support / 39wks / no max
Income-based JSA / 39wks / 104 wk max
Income-related ESA / 39wks / no max
Universal Credit / 3mths / no max
Pension Credit / none / no max

Question 25

How are total benefits capped?

Answer 25

Average UK wage, regionally adjusted