State Benefits And HMRC tax Credits Flashcards
Jane and John have two young daughters and claim child benefit. If John earns £48,000 per year and Jane earns £57,000 per year, they will be subject to a child benefit tax charge of:
A) nil
B) 100 per cent
C) 70 per cent
D) 7 per cent
C) 70%
The tax charge is 1% for each £100 of income above £50,000.
Which forms of employment and support allowance is/are means tested?
A) contribution based ESA only.
B) income based ESA only.
C) both contribution based and income based ESA.
D) neither contribution based nor income based ESA.
B)
Income based ESA is means tested. Contribution based ESA is based on NI contributions record so it is not means tested.
A major difference between the basic state pension and the single-tier state pension is :
A) the basic state pension is paid at a later age than the new state pension.
B) the new state pension is paid at a later age than the basic state pension.
C) the new state pension has no facility for an individual to claim a state pension based on national insurance contributions paid by the spouse or civil partner.
D) lower levels of national insurance contributions are required to claim a full single-tier state pension.
C)
With the basic state pension it is possible to claim a ‘category B’ pension based on the NIC’s of a spouse or partner, but this is not possible with the new state pension.
Why is it important for a financial advisor to know about state benefits?
Financial advisors need to understand what state benefits a person is entitled to or already claiming in order to give appropriate financial advice. For instance, when working out the level of life assurance cover that a family needs, the income that would be available from state benefits if a family wage earner were to die has to be taken into account.
Once universal credit is fully implemented, parents who are eligiblefor child benefit will have to claim Universal credit instead. True or false?
False.
Universal credit will eventually replace child tax credit, not child benefit.
Which if the following is not a feature of income support?
A) it is only available to claimants who have made National Insurance contribution.
B) it is available for claimants aged between 16 and the qualifying age for pension credit.
C) benefits are tax free.
D) both income and savings are subject to means testing to determine eligibility.
A)
The statement is untrue. Income support is available to people who have not made national insurance contributions.
James has been working in IT support for 12 years. His current job is a fixed-term contract and ends next month. Assuming James has made NI contributions throughout his working life, what benefit is he likely to be able to claim whilst he is unemployed?
A) working tax credit.
B) income support.
C) contribution-based jobseekers allowance.
D) employment and support allowance
C) contribution-based jobseekers allowance.
Aliyah has been working for Abbots transport for 16 weeks. She is 24 weeks pregnant. Which of the following state benefits may she be entitled to?
A) Statutory maternity pay
B) income support
C) child tax credit
D) maternity allowance
D) maternity allowance
She is not entitled to statutory pay because she will not have been with her employer for 26 weeks by her qualifying week.
Statuary Maternity Pay - When is the earliest that Aliyah can begin claiming this benefit?
Eleven weeks before the baby is due.
Malcolm, who is 42 and self employed, has fallen ill and cannot work. Which benefit might he be entitled to?
A) disability living allowance.
B) statutory sick pay.
C) employment and allowance support.
D) attendance allowance.
C) employment and allowance support.
He cannot claim statutory sick pay as he is not employed.
Lucy earns £52,000 per year and her partner Howard has an annual salary of £29,000. They have three children, one at primary school and two at secondary school; their eldest son, Ethan is 18 and studying for 3 A levels. For how many children are Lucy and Howard able to claim child benefit?
A) two: they cannot claim for Ethan because he is over 16.
B) all three because Ethan is still in full time education.
C) none, because Lucy earns more than £50,000 a year
D) none, because their combined household income exceeds £50,000 per year.
B)
All three, they will be able to claim for Ethan until his 20th birthday while he remains in full-time education.
Ian retired in July 2020 at the age of 65. He had made NI contributions for 33 years while he was working but he had a career break of 3 years to care for his sick partner. Is Ian eligible for a full, new state pension?
A) no because he was not continuously through-out his working life.
B) no because he retired too early to claim the new state pension.
C) yes because he had NI paid contributions for more than 30 years.
D) yes, because he was credited with NI contributions whilst he was a carer.
D) yes, because he was credited with NI contributions whilst he was a carer.
Although 35 years NI contributions are required for new state pension Ian would have been credited as a carer for 3 years.
Lydia is 22 and has just begun a new job on a full time permanent contract. Her employer will offer her the opportunity to contract out of the state second pension. True or False?
False.
The state second pension is only available to those who reach state pension age before 6 April 2016.
Lydias NI contributions will build entitlement to the new state pension, which has no additional earnings related element. Therefor it is not possible for Lydia to choose to contract out.
