Chapter 3 - State Benefits

Question 1

What is the difference between contribution art and non-contribution based policies

Answer 1

Contribution based policies work off things such as national insurance contributions and so will only have benefits at a certain level of contributions

Whereas non-contribution based benefits are means tested, and so I only paid for those with specific incomes or capital below a certain level

Question 2

How much can a claimant claim under the bereavement support payment benefit with details

Answer 2

Claimant without dependent children-lump sum of £2500 monthly instalments of £100 for 18 months

Claimant with dependent children-lump sum of £3500 plus monthly instalments of £350 for 18 months

This is paid tax free and is not included in the assessment of benefit income for the purposes of the benefit cap

This is been in acting since April 2017

This seceded the bereavement allowance

Question 3

Describe income related benefits

Answer 3

These are not normally available with anyone with capital over £16,000 and are reduced by £1 a week for every £250 of savings plus this limit but in excess of £6000. This means income related benefits means tested which takes into account, not only the own income and capital put the resources of the civil spouse partner if living together.

Question 4

Describe income support

Answer 4

This is an old income related benefit, which was succeeded by universal credit what does remain in force for some legacy claimants

It is for people who are not in full-time study, have low income and no more than 16,000 in savings work less than 16 hours a week or his partner is working less than 24 hours a week and I’m not receiving either jobseekers allowance or employment and support allowance 

This benefit is not generally taxable, but could be if the claimant is on strike or involved in a trade dispute 

Question 5

Describe jobseekers allowance

Answer 5

 Though an aspect of jobseekers allowance (JSA) was replaced by universal credit it is still a policy with claimants. Claimants must be able to show that they are fit for work, available for work, and actively seeking employment and have made a claimants commitment.

This is contribution based and not means tested. It is payable for a maximum of six months at a rate of £61.05 under the age of 25 and £77 per week for those over 25 once the six months are up if the claimant does not have a job, then they are that entitled to universal credit

Question 6

Describe statutory sick pay

Answer 6

This is not means tested as it is for those who earn enough to pay class one NICs. And is paid when unable to work due to sickness for at least four or more days in a row. This is not means tested as it is payable by the employer, it is taxable as earned income and the employee must also pay class one NIC as if they were earnt

The rate of SSP is £99.35 per week, and to qualify the employee must gross earnings of £123 per week or more. The benefit is paid for up to 20 weeks after that claimant must claim employment and support allowance.

Question 7

Describe employment and support allowance

Answer 7

Employment and support allowance is paid to people unable to work due to illness or disability with the stated. Aim of helping them return to work. There are two types of employment and support allowance.

The new style which is contribution based, and is not means tested, is dependent on the claims NICs history and is taxable

Income based ESA, which is not dependent on NICs and it means tested, and is not taxable

ESA is split into two phases assessment phase and main phase. For employed statutory sick pay continues to apply for the first 28 weeks whereas for self-employed it will be three days.

The assessment says lasts 13 weeks where claimants get up to £77 a week.

The claimants are put into two groups one which is the support group. This is where the claimant is unable to work and so will receive £117.60 per week from week 14 onwards. Then there is the work-related activity group where the claimants will receive at £77 per week 

Question 8

Describe personal Independence payments 

Answer 8

This replaced disability allowance in 2012 eligible for working age, people 816 to state pension age. It is tax free and is not means tested or based on the claimants Nic history.

This is comprised of two components

Daily living which can pay at enhanced rate £92.40 per week and standard rate £61.85 per week

Mobility component with an enhanced rate of £64.50 per week and a standard rate of £24.45 per week

To claim a claimant must have difficulty with activities of daily living or mobility for at least three months and expected to continue for at least nine months or the autumn, Leo and not expected to live longer than six months

They live in components are preparing or eating food, washing and bathing, dressing and undressing, communication, managing medicine/treatments and making decisions about the money 

Question 9

Describe disability living allowance

Answer 9

DLA replaced PIP in April 2013 for disabled people aged between 16 and state pension age. This is also a tax-free benefit.

This is also not means, tested, or based on claimants NIC history

This is made up of two components

Care component with a high rate of £92.40 per week, middle rate of £61.85 per week and low rates of £24.45 per week

Mobility component with two components at a higher rate of £64.50 per week and lower rate of £24.45 per week

It has similar criteria to the personal Independence payment

Question 10

Describe attendance allowance

Answer 10

This is for people over the age of the state pension age who have been suffering from severe disability for a period of six months or longer

Has two levels one of a higher rate which gives £92.40 per week. This is worker’s news on a 24-hour basis.

And a lower rate of £61.85 per week if needed. Night by night or day by day, but not night and day.

This is not taxed and is paid on top of other benefits, as well as not being means, tested or based on claimants NIC history

Question 11

Describe carers allowance

Answer 11

This is a taxable benefit for those of working age, who spend time caring for someone severely disabled who receives DLA, PIP or attendance allowance. The benefit is £69.70 per week. Keiran was not have net earnings of more than 132£132 per week.

Question 12

Bernie has died, aged 80 and has been receiving the basic state pension. What benefits if any could his wife, Betty age 78 beentitled to

Answer 12

Betty can claim state pension based on Bernies N I, record, if this is better than her own

Question 13

Eric is single and without children age 29, and is in recipt of universal credit. As part of this he receives housing benefit which is limited to the cost of renting a room…

Answer 13

In a shared house

Question 14

Sonia has worked all her life, but recently lost her job. She has few savings and is about to receive her first payment of job six Lawrence whilst she looks for work, Sonia should be aware that I benefit is

Answer 14

Payable for up to 6 months if she has made sufficient national insurance contributions

Question 15

Statutory sick pay could be payable to which individual who is off work sick

Joe, who works part time for employer and earned £75 per week

Joel who is self-employed announce £350 per week part time

Jake, who is self-employed plumber, earning £15,000 per year

Jazz, who is the employed painter, earning £20,000 per year

Answer 15

Jazz

Question 16

Chris, age 26 has no children or disabilities.

If he wanted to claim working tax credit, he must work a minimum of how many hours

Answer 16

30 hours with payments made by HMRC

Question 17

Hey, successful claim for support for mortgage interest, for a 30-year-old would grant

Answer 17

Interest payments on the first £200,000 of mortgage

Question 18

Describe working tax credit

Answer 18

A payment to top up the earnings of working people on low incomes

For those responsible for a child, who themselves are 16 or over and work at least 16 hours per week

Those without children who are 25 or over and work at least 30 hours per week or those without children who are 16 or over work 16 hours per week and have disability

This is means tested, and is currently paid by the HMRC for employees and the self-employed

Question 19

What is state pension age?

Answer 19

66

Question 20

Describe tax credits

Answer 20

Two types of tax credits both are payable by HMRC It is means tested

Child tax credit has a child under 16 or in full-time education up to age 19 this is paid at a rate of £2940 for each child with an extra payment of £3545 for each disabled child and a further £1430 for severe disabilities however, this only relates to the first two children

Working tax credit for a top up to earnings of working people on low incomes, which is means tested

Question 21

Describe support for mortgage interest

Answer 21

This is for all mortgages DWP will pay interest on up to £200 of mortgage borrowing at a standardised rate when people are unable to pay their mortgage. However, this is in the form of a loan which has interest payable to

Question 22

Describe universal credit

Answer 22

An integrated benefits, which replaces the following benefits, income support, income, based JSA, income related ESA, housing, benefit, child, tax, credit, and working tax credit

It is means tested, tax-free and paid monthly into a bank or building society account that pays a standardised allowance of £334.91. A month 

Question 23

What are the benefit cap levels?

Answer 23

Central London for a couple of single people with children. It is £442.31 a week equalling £23,000 a year and £296.35 a week for single people with no children which equals £15,410 a year

Elsewhere it is £384.62 per week which equals 20 grand per year for couples or single people with children and £257.69 a week or £13,400 a year for single people with no children

Question 24

What are protected payments?

Answer 24

Protected payments are part of the new state pension and is in effect of the replacement of the legacy system for anyone who had built up entitlements greater than the amount of the full new pension under the legacy schemes will be entitled to a protected payment on top of the scheme, ensuring that nobody loses out

Question 25

What do you need, to benefit from the full new state pension?

And how do NICs work?

Answer 25

A total of 35 years, NIC contributions must either be paid or deemed to be paid by virtue of NIC credits. To benefit from any pension, at least 10 years worth of contributions or deemed contributions will be required.

The benefit is taxable, not means, tested and unaffected by the receipt of other Social Security benefits. Providing a weekly level of new state pension at £185.15.

There are multiple classes of NICs,

class one which is for employees,

class two and four, which are for the self-employed where close to nicks build up the entitlement, while class for contributions contribute to the common fund.

Class three, which are voluntary contributions for individuals who want to build up entitlement but do not pay Either class 1 or class 2

You can also have an eye credits, which are granted to those who do not pay NICs because they have been in receipt of a range of qualifying benefits

Question 26

What are SERPS and S2P

Answer 26

State earnings related pension scheme and its late replacement state second pension were top up state pension schemes in which employees liable to class one NICs made contributions and received taxable benefits from the S.p.a.

Question 27

Describe state pension credit

Answer 27

There are two components guarantee credit which aims to provide a minimum level of income for those over a certain age, being the state pension age

Savings credit component, which is a legacy benefit

Question 28

After what period does jobseekers allowance become means tested?

Answer 28

Six months

Question 29

Who pays statutory sick pay?

Answer 29

This is paid by the employer

Question 30

How many hours must someone work a week to qualify for working tax credit, assuming that they are aged over 25, have no children and do not have a disability

Answer 30

30 hours per week

Question 31

Is the new state pension contributory

Answer 31

Yes

Question 32

How long is statutory sick, pay payable?

Answer 32

28 weeks

Question 33

What does supports for mortgage interest cover?

Answer 33

For all mortgages, the DWP will pay interest on a £200,000 of the mortgage borrowed at a standardised rate

Question 34

How would the income from an income protection insurance policy affect someone’s personal Independence payments?

Answer 34

The payment will not be affected at all

Question 35

What is the maximum permitted level of savings before which any income related Benefits are reduced

Answer 35

£6000

Question 36

To what extent if I tall are the costs of life cover taken into account by the reduction in yield figures of a whole of life policy

Answer 36

They are excluded

Question 37

If someone is struggling on a low income job which state benefit could potentially help

Answer 37

Universal credit

Question 38

What payments of personal Independence payments based off?

Answer 38

They are not means tested or based on national insurance contributions

Question 39

Is someone retiring who is date of birth is the first of the November 1965. Han, in how many years time can we expect to receive his new state pension?

Answer 39

10 years this is because of the rising state pension age which currently is 66 however is rising to 67

Question 40

How far back can I claim for child tax credit be backdated if at all

Answer 40

A claim for child tax credit can be backdated, no more than one month

Question 41

When a client is in receipt of state, pension credit and then receive support from mortgage interest loan payments, how would the payment be made?

Answer 41

Immediately, up to £100,000 of any mortgage covered with no limits on the length of claim

Question 42

Karen is approaching her state pension age and has been told that she will receive a protective payment, what is this?

Answer 42

It is an additional element to the new state pension that is based on her previous S2P or SERPS entitlement

Question 43

For what reason might you not qualify for the guaranteed elements of the state pension credit?

Answer 43

If you are an income of over £300 per week