Topic 2: Understand the sources of money

Question 1

How do people become employees?

Answer 1

When people have jobs, they become employees.

Question 2

What is an employer?

Answer 2

The person or organisation for which they work is called their employer.

Question 3

What does self-employed mean?

Answer 3

When people work for themselves, this is known as self-employed.

Question 4

What do self-employed people have to do?

Answer 4

Self-employed people must follow rules set out by the government.

Question 5

What is full-time work?

Answer 5

Full-time work means working for all the working day and week, all year round except for paid holidays.

Question 6

What days and hours is full-time work for offices and shops?

Answer 6

• 9am - 5pm
• with one hour off for lunch
• for 5 or 6 days a week

Question 7

Why do some employers have their employees working shifts?

Answer 7

In some business, they need staff for all of the hours for which they are open, so they have employees working in shifts.

Question 8

What is a shift?

Answer 8

A shift refers to working hours which have been moved/shifted to hours that are different from 9am to 5pm. Therefore, the working day is instead divided into different periods and each period is said to be one shift.

Question 9

What do people who work part-time do?

Answer 9

People who work part-time work for part, or some, of the employer’s working day, week or year.

Question 10

What are some examples of when a part-time worker might work?

Answer 10

• a few hours each day
• a few hours in a working week
• several months in a year

Question 11

What is an employment contract and what must it state?

Answer 11

An employment contract is a written agreement between the employee and the employer giving details about the job. It must state whether the employee is full-time or part-time.

Question 12

What does EMA stand for?

Answer 12

Education Maintenance Allowance

Question 13

What is EMA?

Answer 13

EMA scheme is a weekly payment of between £10 and £30 a week, available to qualifying students over the age of 16 in full-time education in Scotland, Wales and Northern Ireland.

Question 14

What must students have to qualify?

Answer 14

Students must have 100% attendance to qualify.

Question 15

What is the EMA benefits in Scotland?

Answer 15

In Scotland, a weekly EMA benefit of £30 is available to students whose household income is less than £20,351 a year (only one dependent child) or £22,403 a year (two or more dependent children).

Question 16

What is the EMA benefits in Wales?

Answer 16

In Wales, the benefit is available to students from households with an income of less than £20,817 a year.

Question 17

What is the EMA benefits in Northern Ireland?

Answer 17

In Northern Ireland, it is available to those students whose household income is less than £33,950 a year.

Question 18

What does JSA stand for?

Answer 18

Jobseeker’s Allowance

Question 19

What must you be to get JSA?

Answer 19

• available for and actively seeking work
• between 18 and state pension age
• working less than 16 hours a week on average

Question 20

What do you need to do to get JSA?

Answer 20

• You will need to attend an interview at the job centre.
• An adviser will help you to draw up a “jobseeker’s allowance” - this will set out the steps that you agree to take to find work.
• To keep getting benefit, you will have to attend regular job search reviews which are usually every fortnight.

Question 21

What will JSA be replaced with in October 2013?

Answer 21

JSA along with many other state benefits will be replaced with a new benefit called Universal Credit.

Question 22

What is income support?

Answer 22

Income support is a benefit that may be paid if you cannot be available for full-time work and do not have enough money on which to live.

Question 23

How many hours can you work up to and still get income support?

Answer 23

You can work up to 16 hours a week and still get income support.

Question 24

What does how much income support you receive depend upon?

Answer 24

whether you are:

• a single (lone) parents
• caring for someone who is sick or elderly
• pregnant or have recently given birth

Question 25

What may you also receive with income support?

Answer 25

You may also receive financial help towards your rent and Council Tax.

Question 26

What does ESA stand for?

Answer 26

Employment and Support Allowance.

Question 27

What is ESA?

Answer 27

ESA is a benefit that is paid to people who are disabled or unable to work because of illness. It is paid for the first 13 weeks at a low rate and after that time, the claimant is expected to undergo an assessment to see if they are able to do some kind of work even if it is not a full-time job or the job that they did before they became ill.

Question 28

What are ESA claimants offered?

Answer 28

Claimants are offered personal support, by being given to assess to a specially trained personal adviser and a wide range of further services, including training, condition managing and help finding appropriate employment if they are able to do some kind of work.

Question 29

What is child benefit?

Answer 29

Child benefit is a payment that you can claim for your child.

Question 30

How often is child benefit paid?

Answer 30

Child benefit is usually paid every 4 weeks but in some cases it can be paid weekly.

Question 31

Who is benefit paid to?

Answer 31

Benefit is paid to the parents or guardians if any child is under the age of 16, or over the age of 16 and in full-time education.

Question 32

What is basic state pension?

Answer 32

Basic state pension is a pension paid to you by the government when you reach State Pension age.

Question 33

What is basic state pension based on?

Answer 33

It is based on the number of “qualifying years” gained through National Insurance contributions that you have paid.

Question 34

What does S2P stand for?

Answer 34

State Second Pension.

Question 35

When was S2P introduced and what is it?

Answer 35

State Second Pension was introduced in April 2002 to replace the State Earnings Related Pension Scheme. When an individual reaches state retirement age, their entitlement to S2P is based on their level of earnings during their working life and their NI record.

Question 36

What is an investment?

Answer 36

If a person has a large sum of money that they want to put away for a long period of time, this is usually referred to as an investment.

Question 37

Where can people invest their investment?

Answer 37

• they can invest in shares.
• they can buy property with their money and rent it out.
• they can simply put it in a bank or building society account and receive interest.

Question 38

What is investment income for people that have invested in shares, a property or a bank?

Answer 38

• for shares, the income is called “dividends”
• for property, the income is called “rent”
• for bank and building society accounts, the income is called “interest”

Question 39

What is the most important source of income for younger people?

Answer 39

Gifts of money are probably the most important source of income for younger people.

Question 40

What is a will?

Answer 40

A will is a document written and signed by an individual that gives instructions about what should happen to all of the things that they own after they have died.

Question 41

Who are executors?

Answer 41

Executors are he people who carry out the instructions in the will.

Question 42

What is the job of executors?

Answer 42

Executors are given the job of collecting together all of the possessions and money owned by the person who have died.

Question 43

What is an estate?

Answer 43

The possessions of someones who has died are known as the deceased’s estate.

Question 44

Who else must sign a will?

Answer 44

Two other people, who saw the will-maker sign the document must also sign the will as witnesses.

Question 45

What does intestate mean?

Answer 45

If someone does not leave a will, they are said to have died intestate.

Question 46

What does IHT stand for?

Answer 46

Inheritance tax

Question 47

What is IHT paid on?

Answer 47

IHT is paid on the total value of the estate before it is divided between the beneficiaries.

Question 48

What happens if the estate is not complicated in the tax year 2013-2014?

Answer 48

If the estate is not complicated in the tax year 2013-2014, the first £325,000 of an instate is always tax free. This amount is known as the IHT “threshold”. IHT is charged at 40% of the estate above £325,000.