Unit 1 Topic 5 - State benefits and HMRC tax credits Flashcards
Which benefits did Universal Credit replace from 2013?
- Income Support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Working Tax Credit and Child Tax Credit
- Housing Benefit
Which benefits remain outside of Universal Credit?
- Carers Allowance
- Contribution-based Jobseeker’s Allowance and Contribution-based Employment and Support Allowance
- Disability Living Allowance/Personal Independence Payment
- Child Benefit
- Statutory Sick Pay
- Statutory Maternity Pay
- Attendance Allowance
Outline features of Working Tax Credit.
- Designed to top up earnings of employed or self employed on low incomes.
Extra for:
- Working households in which someone has a disability
- Costs of qualifying childcare.
Outline features of Income Support
- Tax free benefit to help people whose income is below level or work less than 16 hours per week.
- Eligibility not dependent on NICs.
- Means tested on both income and savings.
Range of people who can claim:
- between 16 and qualifying age for state Pension Credit
- pregnant or singe parent with child aged under five
- unable to work because they are sick or disabled
- caring for a disable or elderly person
- unemployed
- only able to work part time
Outline features of Jobseeker’s Allowance.
Contribution based
- Benefit for people who are unemployed or working less than 16 hours a week.
- Eligible only if they have paid sufficient Class 1 NICs.
- Paid at a fixed rate for a maximum of six months.
- Payments are made gross but taxable.
- Claimants usually credited with NICs for every week they receive JSA.
Income based
- Being replaced by universal credit.
Outline features of Support for Mortgage Interest Loan
- Those in receipt of Income Support, Jobseeker’s Allowance, Universal Credit or Pension Credit can apply.
- SMI will pay interest on mortgage of up to £200,000 (£100,000 if made with pension credit).
- SMi loan is subject on interest.
Outline features of Statutory Maternity Pay.
- Benefit paid by employer to women who become pregnant provided that:
- average weekly earnings are above a certain threshold
- working for their employer continuously for 26 week prior to their ‘qualifying week’ which is 15th week before their baby is due.
- SMP payable for 39 weks. Earliest is 11 weeks before the baby is due, latest when baby is born.
Two rates
- 90 percent of employee’s average weekly earnings
- After that at flat standard rate
- SMP is taxable and NICs are due.
Outline features of Maternity Allowance.
- For people who can’t claim SMP.
- Paid by department for Work and Pensions.
- Not available to all. Certain criteria.
- Paid at a lower rate than SMP.
- No tax or NICs on amount paid.
- Payable for 39 weeks.
- Earliest it can begin is 11 weeks before baby is due and latest is when baby is born.
Outline features of Child Benefit
- Tax free benefit available to parents.
- Does not depend on having paid NICs nor is it affected by receipt of other benefits.
- Available for each child under 16, continuing up to 19 if child is in full time education or approved training programme.
- Higher rate for eldest and lower rate for the rest.
- Child benefit is means tested. Either individual has over £50,000 tax charge applied at 1% for every £100 over £50,000. (ie £60,000 would be 100%).
Outline features of Child Tax Credit
- People bringing up children on low income.
- Child under 16 or under 20 in education or training.
- Does not have to be working, no income threshold.
- If all children born before 6 April 2017 extra ‘family element’ is payable.
- If individual lives in an area where Universal Credit can be claimed they will apply for Universal Credit instead.
Outline features of Statutory Sick Pay.
- Paid by employers to employees who are off sick for four days or longer provided their average weekly earnings are above the level at which NICs are payable.
- Paid for max 28 weeks.
- Subject to tax and NI deductions
Outline features of Employment and Support Allowance.
- For people who are ill or disabled.
- Contribution based
- Eligible for Universal Credit, depends on NICs.
- Not means tested and taxable.
- Income based
no NICs,
means tested, not taxable. - Work capability assessment carried out.
- Income based ESA in process of being replaced by Universal Credit but people can still claim contribution based ESA if they have enough NI contributions.
Outline Attendance Allowance.
- Benefit for people over 65 who need help with personal care due to sickness or disability.
- Not means tested and does not depend on having paid NICs.
- Two rates: people who need help during day or day and night.
Outline Disability Living Allowance and Personal Independence Payment.
- DLA is a tax- free benefit for people help with personal care.
- Being replaced by PIP for people aged 16-64.
Two components:
- Care component for daily tasts
- Mobility component: difficulty in walking etc.
Outline Carer’s Allowance.
- For people caring for a sick person.
- Does not depend on having paid NICs. Taxable.
- Affects other benefits of claimant as well as the other person.
