Unit 1 Topic 5 Flashcards
Benefits can impact the financial planning in two bigs way :
They affect what financial protection someone might need when getting a mortgage (life insurance, income protection etc
Benefits are often means-tested, so increased income/assets from a financial plan could reduce benefit eligibility. Bummer.
What universal credit replaces ?
Income Support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Working Tax Credit
- Child Tax Credit
- Housing Benefit
What is universal credit
a means-tested benefit for working-age people. The amount depends on income and circumstances. There’s a basic allowance, plus extra for disabilities, kids, housing costs and more
What is a Support for Mortgage Interest Loans
Before 2018 , was a benefit to help you to repay your mortgage interest if you receive Universal credit , or other benefits , after 2018 is a loan . A second charge mortgage gets added to the property and must be repaid when sold.
What is benefit cap ?
limits total benefit income to the average UK wage, to stop people being better off not working.
What is statutory maternity allowance
Statutory Maternity Pay - paid by employers to pregnant employees. Must have worked there 26 weeks before 15th week before due date. Payable for 39 weeks max. Lower rate then standard rate. Taxable.
What is maternity allowance
Maternity Allowance - for self-employed. Lower rate than SMP but not taxed.
Payable for 39 weeks maxim and can be claimed 15th week before due date or not latter than the baby is born
What is child benefit
tax free payment per child under 16, or 19 if in education. Not means tested.
What is child tax credit
now replaced by Universal Credit. Used to help low income parents.
What is statutory sick pay
paid by employers for sickness over 4 days. Must earn over a threshold. Limited number of weeks. Taxable.
What is employment support allowance
for ill/disabled. Contribution-based isn’t means-tested. Income-based is. Involves assessing work capability.
What is attendance allowance
for state pension age people needing care due to illness/disability. Not means tested. Two rates based on level of care needed.
What is disability allowance and personal independence payment ?
help with care and mobility for under state pension age. Being replaced by PIP. Care and Mobility components.
What is carer’a allowance
for people caring for the ill/disabled. Doesn’t depend on National Insurance contributions. Taxable.
When in hospital, NHS covers needs usually met by benefits. Benefits generally continue if in hospital.
What is basic state pension
originally just for employed people. Now includes self-employed. Need 30+ years of NI contributions. Less if fewer contributions.
