unit 1 topic 5- State benefits and tax credits Flashcards

1
Q

Which benefits did Universal Credit replace from 2013?

A
  • Income Support- Income-based Jobseeker’s Allowance- Income-related Employment and Support Allowance- Working Tax Credit and Child Tax Credit- Housing Benefit
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2
Q

Which benefits remain outside of Universal Credit?

A
  • 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
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3
Q

Outline features of Working Tax Credit.

A
  • 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.
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4
Q

Outline features of Support for Mortgage Interest Loan

A
  • 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.
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5
Q

Outline features of Statutory Maternity Pay.

A
  • 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.
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6
Q

Outline features of Maternity Allowance

A
  • 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.
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7
Q

Outline features of Child Benefit

A
  • 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%).
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8
Q

Outline features of Statutory Sick Pay.

A
  • 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
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9
Q

Outline features of Employment and Support Allowance.

A
  • 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.
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10
Q

Outline Attendance Allowance.

A
  • 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.
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11
Q

Outline Disability Living Allowance and Personal Independence Payment.

A
  • 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.
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12
Q

Outline Carer’s Allowance.

A
  • 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.
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13
Q

Outline Basic State Pension

A
  • Paid the employed and self employed people who have made sufficient NI contributions. At least 30 years.- Those not enough NICs may receive Category B based on spouse or civil partner.
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14
Q

Outline Additional State Pension

A
  • For those who reach state pension age before 6 April 2016.- Only available to employed people who paid Class 1 NICs.
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15
Q

Outline Pension Credit

A

Two elements:- Guarantee Credit - tops up and individual’s weekly income to a specified minimum amount.- Savings Credit - additional payment for people aged 65 and over who have saved money towards retirement.- Not taxable.

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16
Q

Outline Single tier state pension.

A
  • For people who reach statement retirement age on or after 6 April 2016.- No additional earnings-related element.- Determined by a person’s NICs record.- For max pension must have been credited with 35 years NICs. Not eligible under 10 years.- Carers are credited with NICs.
17
Q

What is the Triple Lock Guarantee?

A

Both basic state pension and single-tier state pension increase by the minimum of:- Earnings (measured by Average Weekly Earnings Index)- Prices (CPI)- 2.5%