Unit 1 Topic 5 Flashcards by Martyna R

What is Universal Credit primarily a means-tested benefit for?

(A) Retired individuals above state pension age.
(B) People in full-time education.
(C) People of working age.
(D) Individuals with high levels of savings.

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Who typically qualified for Working Tax Credit?

(A) Anyone over the age of 16.
(B) Employed people, those with disabilities, working households with children.
(C) Individuals receiving Income Support.
(D) Homeowners regardless of their income.

(B) Employed people, those with disabilities, working households with children.

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What does Support for Mortgage Interest (SMI) help certain benefit recipients with?

(A) Paying off the capital amount of their mortgage.
(B) Covering all their housing costs.
(C) Paying the interest on their mortgage.
(D) Providing a lump sum for home improvements.

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What is an important note about SMI?

(A) It covers mortgage capital and interest.
(B) The interest rate paid is always the actual rate on the mortgage.
(C) SMI is a loan secured against the property.
(D) It is repaid through deductions from other benefits.

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Who is eligible for Statutory Maternity Pay (SMP)?

(A) All pregnant women regardless of their employment status.
(B) Employed women who meet certain eligibility requirements.
(C) Self-employed pregnant women.
(D) Unemployed pregnant women.

(B) Employed women who meet certain eligibility requirements.

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Is Statutory Maternity Pay (SMP) taxable?

(A) No, it is tax-free.
(B) Yes, it is taxable.
(C) Only part of it is taxable.
(D) It depends on the recipient’s other income.

(B) Yes, it is taxable.

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Who typically gets Maternity Allowance?

(A) Employed women who are eligible for SMP.
(B) Pregnant women who cannot claim SMP.
(C) All pregnant women regardless of their employment status.
(D) Employers who provide maternity pay.

(B) Pregnant women who cannot claim SMP.

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Jane and John have two young daughters and claim Child Benefit. John earns £48,000 per year and Jane earns £57,000 per year. If the threshold is £50,000, they will:

a) become ineligible for Child Benefit, as one of their incomes is over the threshold.

b) not be liable to an income tax charge as one of their incomes is still under the threshold. is over the threshold.

d) be entitled to an increased amount of Child Benefit as one of their incomes is under the threshold.

b) not be liable to an income tax charge as one of their incomes is still under the threshold. is over the threshold.

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Once Universal Credit is fully implemented, parents who are eligible for Child Benefit will have to claim Universal Credit instead. True or false?

False. Universal Credit is replacing Child Tax Credit not Child Benefit.

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Which of the following is not a feature of new style Jobseeker’s Allowance?

a) It is only available to claimants who have made National Insurance contributions.
b) It is only available for claimants who have savings of less than £6,000.
c) Benefits are taxable.
d) Claimants are credited with NICs.

b) It is only available for claimants who have savings of less than £6,000.

New style Job Seeker’s Allowance is irrespective of savings or partner’s income.

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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 NICs throughout his working life, what benefit is he likely to be able to claim while he is unemployed?

a) Working Tax Credit.
b) Income Support.
c) New style Jobseeker’s Allowance.
d) New style Employment and Support Allowance.

c) New style Jobseeker’s Allowance.

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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 Maternity Pay because she will not have been with her employer for 26 weeks by her qualifying week.

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Aliyah has been working for Abbots Transport for 16 weeks. She is 24 weeks pregnant. When is the earliest that Aliyah can begin claiming this benefit?

As early as 11 weeks before baby is due.

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Malcolm, who is 52 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 Support Allowance.
d) Attendance Allowance.

c) Employment and Support Allowance.

Cannot claim Statutory Sick Pay because he is self employed.

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Lucy earns £52,000 per year and her partner Howard has an annual salary of £29,000. Let’s say the threshold for Child Benefit is £50,000. They have three children, one at primary school and two at secondary school; their eldest son, Ethan, is 16 and studying for three 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.

b) All three, because Ethan is still in full-time education.

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Ian retired in the current tax year at the age of 66. He had made NICs for 33 years while he was working but he had a career break of three years to care for his sick partner. Is Ian eligible for a full, new state pension?

a) No, because he was not continuously employed throughout his working life.
b) No, because he retired too early to claim the new state pension.
c) Yes, because he had paid NICs for more than 30 years.
d) Yes, because he was credited with NICs while he was a carer.

c) Yes, because he had paid NICs for more than 30 years.

Ian would have been credited with NICs for three years that he was caring.

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Lydia is 22 and has just begun a new job on a permanent, full-time contract. Her employer will offer her the opportunity to contract-out of the state second pension. True or false?

False. The state second pension was available to those who reached state pension age before 6 April 2016.

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How do state benefits primarily aim to affect financial planning?

a) By encouraging significant investment opportunities.
b) By replacing a substantial portion of an individual’s income.
c) By providing a minimum level of financial protection for those in need.
d) By ensuring everyone achieves a comfortable lifestyle regardless of their circumstances.

c) By providing a minimum level of financial protection for those in need.

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What is a potential impact of some benefits being reduced or lost?

a) It always leads to increased personal savings.
b) It can significantly alter financial planning decisions.
c) It has no real effect on individuals’ financial situations.
d) It primarily affects individuals with very high incomes.

b) It can significantly alter financial planning decisions.

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What is a noted limitation of most state benefits?

a) They completely eliminate the need for personal financial security.
b) They are primarily designed to provide financial security rather than prevent extreme poverty.
c) They offer very high levels of income replacement for all claimants.
d) They are universally available regardless of income or circumstances.

b) They are primarily designed to provide financial security rather than prevent extreme poverty.

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Which of the following is identified as a support available for people on low income?

a) Personal Independence Payment (PIP)
b) Carer’s Allowance
c) Universal Credit
d) Disability Living Allowance (DLA)

c) Universal Credit

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What is the ‘maximum benefit cap’ in the context of Universal Credit?
a) The highest possible amount of Universal Credit an individual can receive in their lifetime.
b) A limit on the total amount of benefits a household can receive, based on average earnings.
c) The maximum amount of earnings an individual can have before their Universal Credit is reduced to zero.
d) A cap on the administrative costs associated with processing Universal Credit claims.

b) A limit on the total amount of benefits a household can receive, based on average earnings.

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Which of the following benefits is specifically mentioned as not being included in Universal Credit?
a) Income Support
b) Jobseeker’s Allowance
c) Child Benefit
d) Housing Benefit

c) Child Benefit

Which of the following is designed to help top up the earnings of employed people, especially those on lower incomes?
a) Statutory Sick Pay
b) Maternity Pay
c) Working Tax Credit
d) Allowance

c) Working Tax Credit

What is the current status of Working Tax Credit and Child Tax Credit for new claimants? a) They are still available for all eligible individuals. b) They have been replaced by Jobseeker's Allowance. c) They have been replaced by Universal Credit, and you can only claim them now if you were already receiving them. d) They are now paid as a lump sum at the end of the tax year.

c) They have been replaced by Universal Credit, and you can only claim them now if you were already receiving them.

What is the main purpose of Jobseeker's Allowance (JSA)? a) To provide long-term financial support for individuals unable to work due to illness. b) To help people who are unemployed and actively seeking work. c) To supplement the income of individuals in low-paying jobs. d) To provide financial assistance to students during their studies.

b) To help people who are unemployed and actively seeking work.

What are the two main types of Jobseeker's Allowance mentioned in your notes? a) New style JSA and Income-based JSA. b) New style JSA and Old style JSA. c) Universal JSA and National JSA. d) Employment JSA and Support JSA.

a) New style JSA and Income-based JSA.

What is the maximum duration for which "New style JSA" is typically payable? a) 3 months b) 6 months c) 12 months d) There is no maximum duration.

b) 6 months

What is the important note regarding claiming "New style JSA"? a) It can be claimed at the same time as Universal Credit. b) It is the primary benefit for individuals with high savings. c) It is administered by a different government agency than other benefits. d) You can only claim it if you have paid enough National Insurance contributions.

d) You can only claim it if you have paid enough National Insurance contributions.

What is the purpose of Support for Mortgage Interest (SMI)? a) To provide a grant to help first-time buyers with their mortgage deposit. b) To help people on certain benefits pay the interest on their mortgage. c) To offer financial assistance to homeowners for property repairs. d) To completely cover the mortgage payments for unemployed individuals.

b) To help people on certain benefits pay the interest on their mortgage.

What does Support for Mortgage Interest (SMI) not cover? a) The interest payments on the mortgage. b) Insurance premiums for the building. c) The capital repayment of the mortgage. d) Accrued interest.

c) The capital repayment of the mortgage.

What is the nature of SMI? a) It is a grant that does not need to be repaid. b) It is a loan secured against the property. c) It is a direct payment made to the mortgage lender. d) It is a temporary benefit that is written off after a certain period.

b) It is a loan secured against the property.

What does the benefits cap set a limit on? a) The total amount of individual benefits a person can claim. b) The total amount of benefits a household can receive. c) The amount of any single benefit that can be claimed. d) The number of different benefits a household can claim.

b) The total amount of benefits a household can receive.

Who is typically eligible for Statutory Maternity Pay (SMP)? a) Any woman who is pregnant, regardless of their employment history. b) Employed women who meet specific earnings and continuous employment criteria. c) Self-employed pregnant women who have paid sufficient National Insurance contributions. d) Unemployed pregnant women who were recently in employment.

b) Employed women who meet specific earnings and continuous employment criteria.

What is the earliest that Statutory Maternity Pay (SMP) can typically start? a) 6 weeks before the baby is due. b) The week the baby is born. c) 29 weeks into the pregnancy. d) 11 weeks before the baby is due.

d) 11 weeks before the baby is due.

What is the payment structure for Statutory Maternity Pay (SMP) during the initial period? a) A percentage of the employee's average weekly earnings. b) A fixed flat rate for all employees. c) A combination of a lump sum and weekly payments. d) Equivalent to the national minimum wage.

a) A percentage of the employee's average weekly earnings.

Who is typically eligible for Maternity Allowance? a) All pregnant women, regardless of their employment history. b) Employed pregnant women who do not meet the continuous employment criteria for SMP. c) Pregnant women who cannot claim Statutory Maternity Pay (SMP) and meet specific criteria. d) Self-employed pregnant women who have paid sufficient National Insurance contributions.

c) Pregnant women who cannot claim Statutory Maternity Pay (SMP) and meet specific criteria.

What is the maximum duration for which Maternity Allowance is payable? a) 39 weeks b) 26 weeks c) 52 weeks d) Until the child reaches one year old.

a) 39 weeks

What is the earliest that Maternity Allowance can typically start? a) 6 weeks before the baby is due. b) The week the baby is born. c) 11 weeks before the baby is due. d) 29 weeks into the pregnancy.

c) 11 weeks before the baby is due.

Is eligibility for Child Benefit typically affected by National Insurance contributions? a) No, eligibility is not affected by National Insurance contributions. b) Yes, you need a certain number of qualifying years of NI contributions. c) Only for higher earners does NI contribution history matter. d) Self-employed individuals have different NI requirements for Child Benefit.

What is the "High Income Child Benefit Charge"? a) A penalty for claiming excessive amounts of Child Benefit. b) An additional payment for families with more than two children. c) A charge that applies if the higher earner in a couple has an adjusted net income above a certain threshold. d) A charge levied on employers who offer Childcare Vouchers.

c) A charge that applies if the higher earner in a couple has an adjusted net income above a certain threshold.

What can potentially reduce an individual's adjusted net income for the High Income Child Benefit Charge? a) General household expenses. b) Personal pension contributions and charitable donations. c) Savings account interest. d) Income from investments.

b) Personal pension contributions and charitable donations.

Who typically pays Statutory Sick Pay (SSP)? a) Directly by the government. b) Through a separate sickness benefit fund. c) Paid by employers to employees who are off work due to sickness or disability. d) By the employee's trade union or professional body.

c) Paid by employers to employees who are off work due to sickness or disability.

What is the maximum duration for which Statutory Sick Pay (SSP) is payable for a single period of sickness? a) Two consecutive weeks. b) Four or more consecutive days of sickness. c) Six consecutive weeks. d) Twenty-eight weeks.

b) Four or more consecutive days of sickness.

For whom is (Employment and Support Allowance (ESA) primarily intended? a) People who are unemployed and actively seeking work. b) People who have recently retired due to ill health. c) People who are pregnant and unable to work. d) People who are ill or disabled and have limited capability for work.

d) People who are ill or disabled and have limited capability for work.

What is the basis for "Contributory" Employment and Support Allowance (ESA)? a) It is based on the claimant's National Insurance Contributions record. b) It is means-tested, taking income and savings into account. c) It depends on the severity of the individual's illness or disability. d) It is paid at a higher rate for those with significant savings.

a) It is based on the claimant's National Insurance Contributions record.

Attendance Allowance is for people who have reached state pension age and need help with what? a) Finding employment. b) Household bills and rent. c) Personal care due to sickness or disability. d) Transportation costs.

c) Personal care due to sickness or disability.

Attendance Allowance has different levels of benefit depending on what factor? a) The claimant's income and savings. b) The specific medical condition of the claimant. c) Whether the claimant lives alone or with family. d) The amount of care needed (day and/or night).

d) The amount of care needed (day and/or night).

Disability Living Allowance (DLA) is a tax-free benefit for people aged what? a) 16 to 64. b) Under 16. c) 18 and over. d) Under state pension age.

b) Under 16.

Personal Independence Payment (PIP) may have two components. What are they? a) Care component and mobility component. b) Income support and housing benefit. c) Employment component and support component. d) Daily living allowance and reduced earnings allowance.

a) Care component and mobility component.

Is Carer's Allowance taxable? a) No, it is a tax-free benefit. b) Yes, it is taxable and must be declared on tax returns. c) Only if the carer's total income exceeds a certain threshold. d) It is taxed at a lower rate than other benefits.

b) Yes, it is taxable and must be declared on tax returns.

State Pension is payable from which age, and what is the planned change? a) From age 60, gradually increasing to 65. b) From age 65, gradually increasing to 68 between 2037 and 2039. c) From age 67, with no further planned changes. d) From age 70, with a planned decrease to 68.

b) From age 65, gradually increasing to 68 between 2037 and 2039.

Additional State Pension was generally only available to which group? a) Self-employed individuals with high earnings. b) Those who had a private pension scheme through their employer. c) Employed people who paid National Insurance Class 1. d) Those who deferred their State Pension beyond the normal retirement age.

c) Employed people who paid National Insurance Class 1.

To receive the full amount of the new State Pension, what is the general requirement regarding qualifying years of National Insurance Contributions (NICs)? a) Generally requires 35 years of NICs for the full amount. b) Generally requires 20 years of NICs. c) Generally requires 40 years of NICs. d) Generally requires the individual to have paid NICs in every working year.

a) Generally requires 35 years of NICs for the full amount.

What is the "triple lock guarantee" for State Pension and new State Pension? a) It ensures the pension increases every three years by a fixed percentage. b) It locks the State Pension at three times the rate of inflation. c) It provides three different ways for individuals to contribute to their State Pension. d) It guarantees the pension will increase each year by the highest of earnings growth, inflation, or 2.5%.

d) It guarantees the pension will increase each year by the highest of earnings growth, inflation, or 2.5%.

How is "earnings" measured for the purpose of the triple lock guarantee? a) By the average increase in salaries across all sectors. b) Earnings (measured by the average weekly earnings index). c) By the highest-earning 10% of the population. d) By the government's preferred measure of wage growth.

b) Earnings (measured by the average weekly earnings index).