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R01 - Financial Services, Regulation and Ethics > Chapter 2D - State Benefits > Flashcards

Chapter 2D - State Benefits Flashcards

1
Q

If an individual has not paid the required number of contributions for the appropriate NI class to qualify for a benefit, what will happen?

A
  • not payable, even if all other conditions met

- in cases of real need, assistance may come from an alternative benefit

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2
Q

How do state benefits affect the need for private financial provisions?

A
  • reduce the level required

- low level of benefit emphasises how crucial private provisions are

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3
Q

What is a Contributory benefit?

A

only available to those who have made certain NI contributions

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4
Q

Define Means-Tested

A

paid only to those with income/savings below a certain level

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5
Q

True or False: Claiming other benefits may reduce the entitlement to other benefits

A

True

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6
Q

What political consideration is needed when a client is looking at State benefits in the longer term?

A

Changing of party in power can drastically change the regulation surrounding the use of State benefits

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7
Q

True or False: State benefits can be used alone for a client to maintain their desired lifestyle

A

False

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8
Q

What is the purpose of the benefit cap?

A

those on benefits should not be able to earn more in benefits than the average earnings of working households

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9
Q

Who administers the benefit cap?

A

Administered jointly by DWP and local authorities via deductions from housing benefit payments

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10
Q

Which benefits are included in the benefit cap?

A
  • Bereavement allowance (pre 6 April 2017)
  • Child Benefit
  • Child Tax Credit
  • Employment and Support Allowance (ESA), unless they receive the support
  • Housing Benefit
  • Incapacity Benefit
  • Income Support
  • Jobseeker’s Allowance
  • Maternity Allowance
  • Severe disablement Allowance
  • Universal Credit (unless unfit for work)
  • Widowed Parents Allowance
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11
Q

What are the Benefit Cap levels for 2020/21?

A

Outside Greater London

  • Couple/Single Parent with Children; £20k p.a., £384.62 p.w.
  • Single; £13.4k p.a., £257.69 p.w.

Inside Greater London
-Couple/Single Parent with Children; £23k p.a., £442.31 p.w.
Single; £15,410 p.a., £296.35 p.w.

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12
Q

For which benefits does the benefit cap not apply?

A
  • Working Tax Credit
  • Universal Credit (certain circumstances)
  • Armed Forces Compensation Scheme
  • Armed Forces Independence Payment
  • Attendance Allowance
  • Carer’s Allowance
  • Disability Living Allowance
  • Employment Support Allowance (ESA), if you receive the support component
  • Guardian’s Allowance
  • Industrial Injuries Benefits
  • Personal Independence Payment (PIP)
  • War or Widow(er)’s Pensions
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13
Q

When was Universal Credit introduced? What was its main aim?

A

April 2013; to simplify and streamline the benefit system

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14
Q

Which benefits are due to be moved across to Universal Credit in due course?

A
  • Child Tax Credit
  • Housing Benefit
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Working Tax Credit
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15
Q

How is Universal Credit calculated?

A
  • basic rate (standard allowance) dependent on age and whether a single or joint claim
  • Extras (elements) payable for circumstances e.g. children, disability, health condition, paying rent
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16
Q

True or False: Universal Credit allows people to be better off than they would be in work

A

False

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17
Q

What are the main aims of Universal Credit?

A
  • improve claimants incentive to work
  • make it easier for claimants to move in and out of work
  • easier to understand
  • reduce poverty for those on low incomes
  • cut back on fraud and error
  • be more cost-effective
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18
Q

How frequently is Universal Credit paid?

A

Monthly

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19
Q

For Child Benefit:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Universal
  • Non-Taxable
  • £21.05 pw (first child), £13.95 pw (each subsequent child)
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20
Q

For Child Tax Credit:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Means-Tested
  • Non-Taxable
  • Varies; family element £545, child element £2,830 per child (up to 2 born after April 6 2017)
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21
Q

For Maternity Allowance:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Contributions-based
  • Non-taxable
  • £151.20 pw
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22
Q

For Statutory Maternity, Paternity, Adoption and Shared Parental Pay:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Contributions-based
  • Taxable
  • £151.20 pw
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23
Q

How long is Statutory adoption pay payable for?

A

39 weeks

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24
Q

How long is Statutory maternity pay payable for?

A

33 weeks

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25
Q

How long is Statutory paternity pay payable for?

A

1-2 weeks

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26
Q

How do Child Tax Credit and Child Benefit differ?

A

Child benefit is paid for the child, Child Tax Credit makes a tax reduction for the parents of the children.

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27
Q

What is the effect of State Benefits on the need for protection?

A

Benefits rarely produce enough income to maintain a standard of living

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28
Q

What might families use Child Benefit for, if it is not required to make ends meet?

A

To pay into a trust fund or Junior ISA, or to cover insurance premiums that offer protection under unwelcome circumstances

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29
Q

For Income Support:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Means-tested
  • Non-taxable
  • £58.90 pw (single); £116.80 pw (couples)
30
Q

For Jobseeker’s Allowance:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Contributions based for 6 months; means-tested thereafter
  • Taxable
  • Contributions based to max of: £58.90 pw (under 25); £74.34 pw (over 25); £116.80 pw (couples)
31
Q

For Statutory Redundancy Payments:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • None, there is an eligibility criteria
  • Non-taxable
  • Based on number of years service with the employer, to a max of £16,140
32
Q

For Working Tax Credit:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Means-tested
  • Non-taxable
  • Dependent on circumstances/income. Up to £2,045 pa
33
Q

Which specific category of claimant would use Income Support over Universal Credit?

A
  • Low income and severe disability

- Not eligible for Jobseeker’s Allowance or Employment Support Allowance

34
Q

Which type of Jobseeker’s Allowance would you claim if you were entitled to Severe Disability Premium?

A

-Contribution- or Income-Based

35
Q

When an employer offers a redundancy payment in excess of £30,000, what taxation must be applied?

A
  • Income tax on anything over £30k

- employer (not employee) National Insurance

36
Q

What has Working Tax Credit been replaced by for new claimants? What is the only exception to this?

A

Universal Credit, unless entitled to Severe Disability Premium

37
Q

What may be included as an extra feature of Working Tax Credit?

A

A ‘childcare element’ may help cover up to 70% of childcare costs

38
Q

What is the age/hours worked minimum for Working Tax Credit?

A

Over 25 must work 30+ hours per week

39
Q

Homeowners with a mortgage or home improvement loan, and in receipt of a qualifying benefit, may be eligible for what?

A

Support for Mortgage Interest (SMI)

40
Q

How is Support for Mortgage Interest (SMI) paid and recouped?

A

paid as a loan, needs to be repaid when the house is sold or transferred (eg, on death)

41
Q

What does Support for Mortgage Interest (SMI) help to pay?

A

Help paying the interest portion of the mortgage or loan repayments up to £200,000 (£100,000 for state pension credit)

42
Q

How is Support for Mortgage Interest (SMI) paid?

A
  • directly to lender after 39 week wait from benefit claim (no wait for those on State pension credit)
  • Universal Credit claimants need to wait for nine consecutive payments
43
Q

How is Support for Mortgage Interest (SMI) limited for those on Jobseeker’s Allowance?

A

limited to two years

44
Q

For Attendance Allowance:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Not means-tested
  • Non Taxable
  • £89.15 pw (higher) - £59.70 pw (lower)
45
Q

For Carer’s Allowance:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Means-tested
  • Taxable
  • £67.25 pw
46
Q

For Disability Living Allowance:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • None; based on eligibility criteria
  • Non-Taxable
  • Care Component: £89.15 pw (higher); £59.70 pw (middle); £23.60 pw (lower)
  • Mobility Component: £65.25 pw (higher); £23.60 pw (lower)
47
Q

For Employment and Support Allowance:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A

TWO TYPES
Type 1:
-Contribution Based (not means-tested)
-Taxable

Type 2:

  • Income-related (means-tested)
  • Non-taxable

-Assessment phase - £74.35 pw (single >25); Main Phase - up to £74.35 pw (work-related); up to £113.55 pw (support group)

48
Q

For Statutory Sick Pay (SSP):
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Contributions-based
  • Taxable
  • £95.85 pw
49
Q

Who is Attendance Allowance available to?

A

-over state pension age, physically or mentally disabled and in need of help with personal care and/or mobility

50
Q

Who is a Budgeting Loan available to?

A
  • low income

- need help with certain important costs such as clothing, furniture and travel

51
Q

True or False: To claim Carer’s Allowance, you either have to be related to, or live with, the person being cared for?

A

False

52
Q

What specific requirement in is place for Disability Living Allowance?

A

Disabled people who struggle walking and need somebody to look after them

53
Q 
What is replacing Disability Living Allowance (DLA)?
Who is not affected?
What is the key difference?
Is the transfer automatic?
What are the 2020/21 rates?
A
  • Personal Independence Payment (PIP)
  • Anyone born before 8 April 1948 who were already in receipt, or under 16 when the change occurred
  • PIP requires assessment from independent assessors and healthcare professionals to determine the individual need
  • Transfer is not automatic
  • ranges from £23.60 to £151.40 pw
54
Q

True or False: Employment and Support Allowance (ESA) aims to get those with an illness or disability back into work

A

True

55
Q

What is the Motability scheme?

Who is eligible?

A
  • enables disabled people to lease a new car, scooter or powered wheelchair using Government-funded mobility allowance
  • those in receipt of higher rate of mobility DLA; enhanced rate of mobility PIP; war pensioners mobility supplement; armed forces independence payment
56
Q

How long is Statutory Sick Pay paid for?

Who pays it?

A
  • 28 weeks

- employer

57
Q

How do Insurance companies adjust premiums for those on benefits?

A

accounting for employer and state benefits, payout must remain 25% below insured earners income

58
Q

For New State Pension (retired on or after 6 April 2016):
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Contributions-based
  • Taxable
  • Up to £175.20 pw
59
Q

For Basic State Pension (retired before 6 April 2016):
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Contributions-based
  • Taxable
  • Up to £134.25 pw
60
Q

For Additional State Pension (retired before 6 April 2016):
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Contributions-based
  • Taxable
  • According to contribtions
61
Q

For State Pension Credit:
Universal, Means-tested or Contribution-based?
Taxable or non-taxable?
2020/21 Current Rates?

A
  • Means-tested
  • Non-taxable
  • Up to £173.75 pw (single); up to £265.20 pw (couple)
62
Q

What was Additional State Pension?

A

Earnings-based component of the state pension comprising one or more of State Graduated Pension, State Earnings Related Pension or State Second Pension when retiring before 6 April 2016.

63
Q

What does State Pension Credit ensure?

A

minimum income to those of State Pension Age, topping up weekly income.

64
Q

Bereavement Support Payment

  • pay structure
  • claim rules
A
  • first payment of £3,500, followed by 18 months of £350 (£2,500 and £100 monthly if you don’t have children under 20 in full time education)
  • claim must be made within three months of husband, wife or civil partner’s death to get the full amount
65
Q

Cold Weather Payment

  • eligible people
  • payment terms
A
  • already in receipt of other benefits to assist with heating costs in winter months
  • £25 paid for each seven-day period between 1 November and 31 March where the average local temperature recorded as, or forecast to be, freezing or below for seven consecutive days
66
Q

Define Council Tax Reduction

A

Financial help for those on low incomes to pay for their council tax bill

67
Q

Define Funeral Payments

A

help for those on low incomes to pay for funeral cost. May have to be repaid from the estate of the deceased

68
Q

What does the Healthcare Travel Costs Scheme offer?

A

client on low income referred to another NHS or private centre, or for NHS treatment at a hospital can apply for help with travel costs to reach their appointment

69
Q

What does the Healthy Start Scheme offer?

A

Help for pregnant women and low income families who are given vouchers to buy milk, fresh fruit and vegetables, plus coupons for vitamins

70
Q

What does Housing Benefit offer?

A

Assistance with paying rent when on low income, whether in or out of work

71
Q

What is Local Housing allowance?

A

Similar to Housing Benefit, this is paid to a private tenant of a private landlord, when on low income

72
Q

Winter Fuel Payment

  • eligible people
  • payment level
  • used for
A
  • born before 5 October 1954
  • £100 to £300 based on circumstances
  • help to pay increased heating bills in Winter

R01 - Financial Services, Regulation and Ethics (10 decks)

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