Chapter 7: State benefits Flashcards
What benefit does the benefit cap apply to?
income-related Employment and Support Allowance (ESA).
Benefits that are paid for care or disability are not covered by the benefits cap
What are the rates for the benefit cap?
£423.46 per week or around £22,000 per annum for couples.
£283.71 per week or around £14,700 per annum for single adults who don’t have children, or whose children don’t live with them.
What is pension credit? How much is it and what is tax status?
Intended to top-up the income of elderly people to ensure all have a minimum level to live on. It is paid to those above the State pension age.
Pension Credit is not taxable.
Will top-up the income of a single person to £201.05 and a couple to £306.85. These amounts are known as the standard amount or standard minimum guarantee.
What are the two components of pension credit?
Guarantee Credit = An income guarantee paid to those people over the minimum qualifying State pension age.
Savings Credit = Saving Credit is only available to those who reached their State pension age before 6 April 2016, even if it has not yet been claimed.
how is pension credit tested?
Pension Credit is means-tested. Individual capital (or joint capital if appropriate) of less than £10,000 will be ignored, no maximum.
Where income exceeds the lower threshold, tariff income will be calculated based on £1 per £500 of capital above the lower threshold and rounded up to the nearest pound.
Claimant aged 68 has Savings of £18,600, what is his tariff income?
Assumed tariff income = £18,600 – £10,000 = £8,600
£8,600 ÷ £500 = £17.20 per week which would be rounded up to £18 per week and added to any other income.
Purpose of New style Employment and Support Allowance (ESA)?
Designed to help people with disability and illness under state pension age that affects how much they can work. As a result, this benefit may be appropriate to younger people who need help to fund their care requirements.
It provides:
- Money to help fund living costs as the individual is out of work.
- Support to get the individual back to work if they are able.
Eligibility for ESA?
Claimants must have worked and have 2-3 years NI.
People claiming Jobseeker’s Allowance or Statutory Sick Pay cannot claim ‘new style’ ESA.
Those on low incomes can claim Universal Credit and ‘new style’ ESA at the same time but Universal Credit payments are reduced by the amount.
People can work while claiming ‘new style’ ESA if they work less than 16 hours per week and do not earn above £167 per week.
People receiving ‘new style’ ESA may still receive this even if they receive Attendance Allowance and Personal Independence Payment/DLA. They will not receive ESA if they receive the State pension.
New style ESA is not means-tested.
Tax position of ESA and restrictions?
Taxable - yes
NI dependent - yes
Means tested - no
- Benefits paid depending on need to provide basic living expenses (including disability).
- Must qualify and be assessed using the work capability assessment.
- Payments made to those in the work-related activity group are restricted to one year.
- Payments made to those in the support group may be paid up to State Pension age.
What is carers allowance?
Carer’s allowance is payable to people who spend at least 35 hours per week caring for a disabled person. In this case, disability is defined as someone who receives:
- the daily living component of PIP;
- DLA at the middle or highest care rate; or
- Attendance Allowance.
Tax position of carers allowance and restrictions?
Taxable - yes
NI dependent - no
Means tested - yes - not paid if earrings exceed £139
- Must spend at least 35 hours per week caring for someone.
- Must be age 16 or over.
- Person being cared for must receive disability benefits, i.e. Attendance Allowance, PIP or DLA.
- Receipt of this benefit may reduce other benefits.
- Must be UK resident.
What are the two benefits which are non-means tested for the CF8 exam?
- Attendance Allowance (AA).
- Personal Independence Payment (PIP) and Disability Living Allowance (DLA).
what is attendance allowance?
payable to disabled people (either mentally or physically) who need help with personal care such as eating, washing or going to the toilet.
Criteria to be met for attendance allowance
State pension age or older.
Have been suffering from severe disability over a period of six months or more.
Level of benefits for attendance allowance?
A higher rate of £101.75 if care is needed on a 24-hour basis.
Aa lower rate of £68.10 if care is needed by night or by day, but not both
