Unit 1 - Topic 5 State Benefits and HMRC tax credits Flashcards
What support is available for people on low income?
Universal Credit, Working Tax Credit, Income Support, Jobseeker’s Allowance, Support for Mortgage Interest Loan
What support is available for those bringing up children?
Statutory Maternity Pay, Maternity Allowance, Child Benefit, Child Tax Credit
What support is available for people who are sick and disabled?
Statutory Sick Pay, Employment and Support Allowance, Attendance Allowance, Disability Living Allowance/Personal Independence Payment, Carer’s Allowance
What support is available for people in retirement?
Basic State Pension and Additional State Pensions and Category B pension for those turning SPA before 6th April 2016, Single-Tier State Pension for after this date.
What is Universal Credit?
A means-tested benefit for people of working age whether they are in or out of work. It is a simpler structure and replaces Income Support, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Working Tax Credit, Child Tax Credit, Housing Benefit
What is Working Tax Credit?
Designed to top up the earnings of employed or self-employed people who are on low incomes. There are extra amounts for.
What is Income Support?
A tax-free, means-tested benefit designed to help people from 16-SPA whose income is below a certain level and who are working less than 16 hrs per week (or where their partner works for less than 24 hrs on an average week). It is not dependent on people having paid NICs.
Who can claim Income Support?
People aged between 16 and SPA
Pregnant or a single parent with a child aged under 5
Those unable to work because they are sick or disabled
Those caring for a disabled or elderly person
Those who are unemployed
Those who are only able to work part time
What is Jobseeker’s Allowance?
A benefit for people who are unemployed or working less than 16 hours a week and are actively seeking work.
What is the difference between Income-Based Jobseeker’s Allowance and Contribution-Based Jobseeker’s Allowance?
Incom-based is being replaced by Universal Credit. Contribution-based can only be claimed if you have paid sufficient Class 1 National Insurance Contributions. It is paid at a fixed rate for a max of 6 months. Payments are taxable.
What is Support for Mortgage Interest Loan?
This can be claimed if the claimant is in receipt of Universal Credit, Jobseeker’s Allowance or Pension Credit. It is a loan that must be re-paid to help pay the interest on your mortgage. SMI will pay interest on a mortgage of up to £200,000. Payment is made direct to the mortgage lender. The loan is subject to interest and is paid repaid when the property is sold or ownership transferred.
What is the benefits cap?
Limiting the maximum paid in benefits to the level of the average UK wage.
What is Statutory Maternity Pay?
This is received if you are employed, from your employer, as long as your:
Average weekly earnings are above a certain threshold
Have been working for their employer continuously for 26 weeks prior to their ‘qualifying week’.
SMP is payable for a max of 39 weeks - it is taxable and NICs are due on the amount paid.
What is Maternity Allowance?
This is paid by the Department for Work and Pensions, and is for those who are not eligible for Statutory Maternity Pay (self-employed or have recently changed jobs). The amount paid is less than Statutory maternity Pay, however it is not subject to tax or NICs.
What is Child Benefit?
A tax-free benefit available to parents and others who are responsible for bringing up a child. It does not depend on having paid NICs, and is not affected by any other benefit.
This benefit is available for each child under the age of 16, or 19 if the child is in full-time education. A higher rate is paid in respect to the eldest child and a lower rate for every other child.
It is means-tested in the form of an income tax charge if either parent has an income of over £50,000. The tax charge is applied at 1% of Child Benefit for every £100 over £50,000.
