Benefits

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There is no denying our benefits system is a complex one.  With regular changes and renewals (just to keep you on your toes!), such as the upcoming Universal Credit initiative, it means many people are missing out on money because they don’t know what (or how) they can claim.  Don’t let that person be you!

 

Benefits – the basics

While we only offer an outline of the UK benefits system here, we cannot emphasise enough the importance of making sure you are aware of what you are entitled to. If you think any of the following might apply to you, then it’s definitely worth looking in to.

For further information on all of the benefits outlined below, we recommended visiting: www.gov.uk/browse/benefits

Attendance Allowance (AA): for people who are disabled, over the age of 65 and need help looking after themselves. It is paid at two different rates depending on your level of disability and is not means tested.

Carer’s Allowance: available to those who look after someone who receives a qualifying disability benefit. You will need to look after that person for more than 35 hours a week, and earn £100 or less a week (after deductions).

Child Benefit: you may be entitled to this if you are responsible for a child under the age of 16 (or under 20 if they stay in approved education or training).  However, if you or your partner have an individual income of more than £50,000, the benefit has now effectively been removed. Check out www.hmrc.gov.uk/childbenefit to find out more.

Child Tax Credit: you could be eligible for this, for any child until the age of 16 (or under 20 if they stay in approved education or training).  You don’t have to be working to claim, and if you do claim, it won’t affect the child benefits you already receive.  How much you get will depend on your individual circumstances, you can use this tax calculator to find out more. 

Disability Living Allowance (DLA): for people who are severely disabled and are under the state pension age. You must meet the ‘disability rules’ for DLA for a qualifying period of time. This means, in some cases you must have had care needs or mobility problems for a certain period of time before you can claim.

Make sure you are aware of what you are entitled to

Personal Independence Payment (PIP): gradually replacing Disability Living Allowance, for people aged 16-24. Children under 16 will not be eligible for PIP.

Housing Benefit: for those on low income, needing help with rent payments. You can only claim if you are living in the property you are paying rent for.  You cannot get Housing Benefit to help with the repayment of a mortgage or home loan.  It also does not help with Council Tax – however, there are other schemes that may be able help you with this, such as Council Tax Reduction.

Income Support: if you are on low income, you may be entitled to help with your day-to-day living expenses.  You must be under state pension age, and usually over 18.  To claim, you must have no income or a low income, work under 16 hours a week, and not be signed on as unemployed. Also, it is means-tested, which means that any money you have is taken into account in deciding how much you should get.

Jobseeker’s Allowance (JSA): in order to be eligible, you must be at least 18 years old, and below the state pension age. You must work less than 16 hours a week, and not be in full-time education. If you qualify, you will be entitled to receive the benefit to help you get by while applying for a full-time job.  There are two types of JSA you can apply for; ‘contribution-based’ or ‘income-based’ – for further information on each, visit www.jobseekersallowance.net

Employment and Support Allowance (ESA): for those who can’t work because of sickness or disability, and aren’t receiving Statutory Sick Pay.  You must be over 16 and under state pension age.  There are two types of ESA; contributory ESA and Income-related ESA. For more information on each, visit: www.gov.uk/employment-support-allowance/overview

The Government’s Department for Work & Pensions have produced an online guide which can help you check if you qualify for any of these benefits and more. It can also give you an estimate of how much you may be able to get.  To see the online guide, go to www.gov.uk

 

Universal Credit

It is a new benefit system with one single monthly payment

If you are currently claiming any benefits above, or believe you should be entitled to any of them, it is crucial that you start to get to grips with the concept of ‘Universal Credit’.  You may have heard the term used more and more recently, but still don’t fully understand what it is, or whether it affects you – well, you certainly wouldn’t be alone!

Put simply, it is a new benefit system that will replace some of the existing benefits above, with one single monthly payment.

Under this new ‘Universal Credit’ banner, most of the benefits explained above are being merged together, in a government bid to simplify the welfare system.  The execution of Universal Credit will bring with it a whole host of major changes, including:

  • Several benefits and tax credits will merge into a single, monthly payment.
  • The monthly payment will be paid to a household rather than an individual, and will be put straight into a bank account.
  • If you currently get help paying your rent, instead of going direct to the landlord, the money will come to you, in order for you to start paying the landlord.
  • The introduction of an online-only claiming process, with accounts also managed online.
  • Nearly everyone will need to reapply for their benefits.
  • Benefits will be automatically adjusted depending on earnings, which employers enter into a computer system called real-time information.

Universal Credit is currently being piloted in selected towns and cities, with a wider UK roll-out currently planned for October 2014, and will eventually affect nearly eight million people. Therefore, if you currently claim benefits, now is a great time to start to get your head around Universal Credit and how you will manage your budget moving from weekly to monthly payments.

We have really only scratched the surface of what Universal Credit is here, so please don’t worry if you are still a little confused; there is lots of additional support available.  For further information visit: www.moneyadviceservice.org.uk/en/categories/universal-credit

As the benefits system continues to develop we will keep you up-to-date with news, tips and advice – so don’t forget to check in on us!