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Welfare Benefits

The UK benefits system can be complicated and it’s been constantly evolving in recent years as successive Governments implement changes and the slow roll-out of Universal Credit continues…

The benefits system exists to provide practical help and financial support for those who are unemployed and looking for work. It also provides people with assistance if their earnings are low, if they have a disability, are bringing up children, are retired, care for someone or are ill.

Some of the most common benefits include:

Universal Credit (UC)

Universal Credit is a payment to help people with their living costs. It is paid monthly, and people may be able to get it if they are on a low income, out of work or cannot work. Universal Credit has been rolled out to most places in the UK and is the benefit most new claimants for Income-related Employment and Support Allowance, Income-based Jobseeker’s Allowance, Child Tax Credit, Working Tax Credit and Income support will now receive. Universal Credit is replacing the following benefits:

  • Child Tax Credit
  • Housing Benefit
  • Income Support
  • Income-based Jobseeker’s Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)
  • Working Tax Credit

Jobseeker’s Allowance (JSA)

Jobseeker’s Allowance is a benefit for people who are actively seeking employment and are capable of work. You must be under State Pension age to claim this benefit and in the majority of circumstances over 18 years old. You must not be in full-time employment and working no more than 16 hours a week.

There are 3 types of JSA. Income Based JSA is means tested and takes into consideration any income and capital you and your partner may have. In most cases Universal Credit has replaced Income Based JSA. Contribution Based JSA is non-means-tested, dependent on National Insurance Contributions and ignores income and capital of you and your partner for 6 months. ‘new style’ JSA is also non-means tested and dependent on Class 1 National Insurance contributions.

Employment and Support Allowance (ESA)

Employment and Support Allowance (ESA) is a benefit for people who have limited capability for work due to an illness or disability and are not in receipt of Statuary Sick Pay. You must be over 16 years old and under State Pension age. Similar to Jobseeker’s Allowance there is Income Related ESA which is means tested and Contribution Based ESA which is non-means-tested and dependent on your National Insurance Contributions. Most new claims are for ‘new style’ ESA which like ‘new style’ JSA is non-means tested and dependent on National Insurance contributions.

Income Support

This benefit is a means-tested top-up to income available only to people between 16 and Pension Credit Age who are entitled to severe disability premium and a range of tightly defined eligibility criteria which means Income Support has largely been replaced by Universal Credit.

Housing Benefit

Housing Benefit can help people pay their rent if they’re unemployed, on a low income or claiming benefits. It’s being replaced by Universal Credit. Existing claimants will have had an entitlement going back to May 2019 or are entitled to make a new claim because they qualify for the severe disability premium, have reached state pension age or are in supported, sheltered or temporary housing.

Council Tax Support/Reduction

This benefit is administered by your local Council and designed to assist people with their Council Tax bill if they are on a low income. You can be employed or unemployed. This benefit can vary depending on where you live. It is means tested and takes into consideration your income and capital. It is available to people who live in rental properties and to homeowners. This Gov.uk (opens in a new window) page will take you to your local scheme.

Support with Mortgage Interest (SMI)

People who own their own home and on a low income may be eligible for assistance towards interest on their mortgage payments and loans that have been taken out for certain home improvements and repairs. It’s paid as a loan, which will need to be repaid with interest on the sale or transfer of ownership of the home. In order to be eligible for SMI homeowners will need to be in receipt for one of the following: Income Based Jobseeker’s Allowance, Income Related Employment and Support Allowance, Income Support, Pension Credit or Universal Credit.

Tax Credits

There are two types of Tax Credits, Working Tax Credit and Child Tax Credit. Child Tax Credit is a benefit to assist with the costs of bringing up a child. Child Tax Credit has been replaced by Universal Credit for most people. You can only make a new claim for Child Tax Credit if you are entitled to the severe disability premium. In the same way, Working Tax Credit has been replaced by Universal Credit for most people unless there is an entitlement to the severe disability premium..

Personal Independence Payment (PIP)

Personal Independence Payment (PIP) is a benefit for people who are between 16 and State Pension Age who, due to an illness or disability, have additional care needs. This is a non-means-tested benefit and therefore income and capital are ignored. There are 2 parts to this benefit, the daily living component, and the mobility component. This benefit could increase your income anywhere between £23.60 and £151.40 a week. Claiming this benefit can lead to entitlement or increased entitlement to other means-tested benefits.

Disability Living Allowance (DLA)

Disability Living Allowance (DLA) is a benefit for children who have additional care or mobility needs. It has 2 components, the personal care component and the mobility component. Your child must be under 16 years old to claim with additional age rules for the mobility component. This benefit is non-means-tested. For adults, existing Disability Living Allowance claimants are being reassessed for Personal Independence Payments.

Attendance Allowance

This benefit is for people who are over State Pension Age who are either physically or mentally disabled and require either assistance or supervision with their personal care needs or require supervision or support to ensure that they are safe.

It is available to people who live on their own or with others and is not dependent on whether the assistance required is being given. It is a non-means-tested benefit and therefore income and capital are ignored.

If you are in receipt of this benefit it can lead to entitlement or increased entitlement to means-tested benefits. This benefit could increase your income by either £59.70 a week if you have either day time or night time needs, or £89.15 a day if you have both and can lead to entitlement or increased entitlement to some means-tested benefits.

Carer’s Allowance

This benefit is available for people who provide care of more than 35 hours a week to someone who has an illness or disability. The person that you care for has to be in receipt of Attendance Allowance, the middle or higher rate of the care component for Disability Living Allowance or the Daily Living element of Personal Independence Payment. The person claiming Carer’s Allowance is not able to earn more the £128 per week and the benefit is paid at £67.25a week. Even if a person earns more than £128 per week it is important to claim as the underlying entitlement to Carer’s allowance affects the DFG Means-test.

Pension Credit

Pension Credit is a means-tested benefit for people who are on a low income who have reached Pension Credit age. This benefit tops up your weekly income to £173.75 a week if you are single and £265.20 a week for a couple. Claiming this benefit can also lead to entitlement or increased entitlement to other means-tested benefits.

Cold weather payment

This benefit is available if the average temperate in your area is recorded as, or forecast to be, zero degrees Celsius or below for 7 consecutive days. In order to be eligible cold weather payment, you will need to have made a successful claim for one of the following: Income Based Jobseeker’s Allowance, Income Related Employment and Support Allowance, Pension Credit, Income Support or Universal Credit.

Winter fuel payment

This annual payment is made to people over state pension age to help them pay their heating bills. This payment is usually made automatically between November and December if you are eligible and you get a state pension.