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LRD guides and handbook March 2013
State benefits and tax credits 2013
Introduction
Introduction (1,178 words)
State Benefits and Tax Credits 2013 is the revised edition of the Labour Research Department’s annual guide to the benefits system. It ...
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Chapter 1
1. THE WELFARE REVOLUTION (104 words)
Starting this year, some existing welfare benefits will begin to be phased out and replaced by a new benefits system. Means-tested benefits, such as ... Subscribers only
Introduction of Universal Credit (380 words)
The current system of working-age benefits and tax credits is being replaced by Universal Credit which is being phased in over four years between 2013 ... Subscribers only
Universal Credit (803 words)
Claims will be made by households rather than individuals and the amount awarded will depend on the income and circumstances of all the household ... Subscribers only
The Benefit Cap (59 words)
From April 2013 a limit will be put on the total amount of benefit that most people aged 16 to 64 can get. This is called the Benefit Cap. ... Subscribers only
What will happen (176 words)
If you’re affected, your Housing Benefit will go down to make sure that the total amount of benefit you get isn’t more than the cap level. ... Subscribers only
What is covered (87 words)
The Benefit Cap will apply to the total amount that the people in your household get from the following ... Subscribers only
How much is the Benefit Cap? (56 words)
The level of the cap will ... Subscribers only
Who won’t be affected? (130 words)
You won’t be affected by the Benefit Cap if you qualify for Working Tax Credit, or if you get any of the following ... Subscribers only
Department for Work and Pensions Benefit Cap factsheet (332 words)
The cap will be introduced from April 2013 and will apply to the combined income from the main out-of-work benefits, plus Housing Benefit, Child ... Subscribers only
Disability Living Allowance replaced by Personal Independence Payment (310 words)
The government is replacing Disability Living Allowance (DLA) with a new benefit called Personal Independence Payment (PIP) for people of working age. ... Subscribers only
Housing Benefit (277 words)
In England, Wales and Scotland: Size criteria will apply in the social rented sector (e.g. council and housing association properties) replicating ... Subscribers only
Local Housing Allowance rates (41 words)
Local Housing Allowance (LHA) rates will be increased in line with the Consumer Price Index instead of the market rents in each area. The connection ... Subscribers only
Council Tax Benefit changes 2013 (78 words)
Council Tax Support will replace Council Tax Benefit, council tax discounts, exemptions and reductions in April 2013. Some pensioners will be ... Subscribers only
What is Council Tax Support? (199 words)
Council Tax Support is a new local system of help for people who pay council tax. It will replace the current national system of support for people ... Subscribers only
Who is affected (249 words)
People of working age are likely to be most affected by cuts to funding for council tax support. Because support for pensioners is protected, the ... Subscribers only
Who can get it? (102 words)
From 1 April 2013, local authorities in England will be responsible for running their own Council Tax Reduction scheme. ... Subscribers only
Carers (573 words)
Carers UK has issued the following advice on what is happening to Carer’s Allowance with the introduction of Universal ... Subscribers only
The Social Fund (198 words)
In England and Wales changes contained in the Welfare Reform Act 2012 mean that certain elements of the discretionary Social Fund scheme will be ... Subscribers only
Tax Credits (45 words)
Any rise in income of £5,000 or more during the award year will be taken into account when finalising Tax Credit awards. Previously only income ... Subscribers only
Appeals process changes (199 words)
The Department for Work and Pensions (DWP) is revising its appeals process for the benefits it administers and for child maintenance cases. The ... Subscribers only
Benefits advice (91 words)
If you or your members are worried about the effects that the changes to the benefits system will have on your personal situation, you should speak ... Subscribers only
Chapter 2
2. HELP IF YOU ARE ON A LOW INCOME, WHETHER IN OR OUT OF WORK (125 words)
There are a number of benefits — primarily Working Tax Credit, Income Support and Jobseeker’s Allowance — available to people on low incomes, ... Subscribers only
Increases to benefits in 2013 (163 words)
Benefit and tax credit increases are calculated using the Consumer Prices Index (CPI). The TUC has pointed out that in most years the CPI is lower ... Subscribers only
Working Tax Credit (280 words)
Working Tax Credit is paid to those who work but are on a low income. A claim for Working Tax Credit is based on the hours you work and get paid ... Subscribers only
What hours of work are needed (385 words)
From April ... Subscribers only
What happens to your payments if your income changes? (431 words)
If your income in the current tax year is different from the previous year, the amount of tax credits you get may change. If your income changes in ... Subscribers only
Backdated payments (82 words)
If the Tax Credit Office receives your claim on or after 6 April 2013, they will only be able to backdate it up to one month. The same goes for ... Subscribers only
Income Support (30 words)
Income Support helps people who do not have enough to live on. It is for people who do not qualify for Jobseeker’s Allowance or Employment and ... Subscribers only
Who can get it? (253 words)
You will get Income Support if you are not in full-time employment and fall into a category of people who do not have to look for work. This ... Subscribers only
Income Support and lone parents (491 words)
The rules about which lone parents are eligible to claim Income Support (IS) changed in April 2012. The change means that lone parents will now move ... Subscribers only
How much can you get? (316 words)
The amount you get depends on your personal circumstances and your earnings and savings. IS is made up of a personal allowance for you and your ... Subscribers only
Other rules relating to Income Support (462 words)
There is a full disregard for child maintenance payments, meaning any money parents receive from this source is not taken into account when ... Subscribers only
Help if you start work (153 words)
The Job Grant is a one-off, tax-free payment of £100 for people who have been getting IS, Jobseeker’s Allowance (JSA), Incapacity Benefit, ... Subscribers only
Jobseeker’s Allowance (109 words)
Jobseeker’s Allowance (JSA) is the main benefit available to those who are unemployed or working only part-time and seeking work. JSA takes two ... Subscribers only
Who can get it? (190 words)
To qualify for either contribution-based JSA or income-based JSA, you must satisfy all of the conditions below. You ... Subscribers only
Contribution-based JSA (177 words)
To qualify for contribution-based JSA, you must also have paid enough National Insurance contributions; contributions by the self-employed do not ... Subscribers only
How much can you get? (216 words)
The weekly rates of contribution-based JSA are £56.80 if you are under 25 and £71.70 if you are 25 or over. Contribution-based JSA is paid for up ... Subscribers only
Income-based JSA (108 words)
You can claim income-based JSA if you do not qualify for the contribution-based JSA ... Subscribers only
How much can you get? (272 words)
Income-based JSA is means-tested, so the amount you can get is based on an assessment of the needs and income of you and other members of your family. ... Subscribers only
How to claim (319 words)
You should claim JSA on the first day that you are out of work. You cannot get benefit for any day before you claim other than in exceptional ... Subscribers only
Jobseeker’s Agreement (143 words)
To complete your claim you have to go to an interview at your local Jobcentre Plus. At your interview with the adviser, a Jobseeker’s Agreement ... Subscribers only
Jobseeker’s directions and sanctions (221 words)
There have been a number of changes to the rules about the conditions you have to meet in order to remain entitled to JSA and the penalties that can ... Subscribers only
How much will a sanction be and how long will it last? (454 words)
The new sanction regime has three levels of sanctions which last for set periods of time depending on what you may have failed to do. ... Subscribers only
‘Good reason’ why a sanction should not be applied (178 words)
A sanction will not be applied if you can show that you had good reason for your action that led to a sanction being considered. Good reason is not ... Subscribers only
People with disabilities and carers (103 words)
If you have a disability or are a carer, you will be deemed to have good reason for giving up a job or not accepting a job offer if the travelling ... Subscribers only
Sanction concerns (237 words)
PCS is opposed to the stricter benefits regime which it sees as part of an ideological attack on the welfare state with “ministers demanding ... Subscribers only
Funeral Payments (197 words)
These help meet the cost of the funeral of a close friend or relative such as your partner or child. To qualify, you must be receiving Income ... Subscribers only
Cold Weather Payment (171 words)
This payment is made automatically to anyone receiving certain qualifying benefits (see below) if the temperature at specified weather stations is ... Subscribers only
Other financial help: the Social Fund (295 words)
The Social Fund is a special form of welfare benefit provision that is payable for emergency or intermittent needs, in addition to regular payments ... Subscribers only
Chapter 3
3. HELP IF YOU ARE SICK, INJURED AT WORK OR DISABLED (274 words)
There are a number of benefits that you may be able to claim if you are sick, injured at work or disabled. What you get depends on whether you are ... Subscribers only
Statutory Sick Pay (65 words)
If you are in paid work and become sick, you may qualify for Statutory Sick Pay (SSP) from your employer. You may find that your employer has opted ... Subscribers only
Who can get it? (164 words)
To get Statutory Sick Pay (SSP), you must be unable to work because you are sick or disabled. You must earn at least £109.00 a week. If you don’t ... Subscribers only
Exceptions (164 words)
Certain categories of people are excluded from SSP entitlement. If you are in any of these categories, your employer must supply you with form SSP1, ... Subscribers only
How much can you get? (128 words)
SSP is a flat-rate payment with no additions for dependants. It is taxable and liable for National Insurance contributions where applicable. ... Subscribers only
Qualifying days (42 words)
You can only claim SSP for days counted as “qualifying days”. These are usually the days you normally work. Other days may be set as qualifying ... Subscribers only
When to claim (178 words)
To claim SSP you must have been ill for at least four days in a row, including weekends and bank holidays. The days that count for this purpose do ... Subscribers only
Notification rules for SSP (168 words)
Your employer may ask you to follow certain rules about telling them you are off sick. They still have to pay you SSP even if you don’t follow ... Subscribers only
How is it paid? (113 words)
Employers should pay SSP in the same way as they pay wages, and on the same day on which they would pay your wages, for the period you are off sick. ... Subscribers only
Other rules (144 words)
The right to SSP technically ceases if you are on a pregnancy related absence in the four weeks before the due date, however, in practice, an ... Subscribers only
How to appeal (131 words)
If your employer decides you are not entitled to SSP and you do not agree with this, the employer must give you the reasons for its decision in ... Subscribers only
Employment and Support Allowance (337 words)
Employment and Support Allowance (ESA) replaced Incapacity Benefit and Income Support paid because of an illness or disability from January 2011. ... Subscribers only
How does it work? (268 words)
ESA consists of two phases: the assessment phase and the main phase. In most cases, if you qualify for ESA you will not get any money for the first ... Subscribers only
How much can you get? (198 words)
During the assessment phase you are paid a “basic allowance”. This is set at a similar level to that of Jobseeker’s Allowance. If you are aged ... Subscribers only
Contribution-related ESA in 2013 (77 words)
The Welfare Reform Act 2012 limits the amount of time people who are not in the Support Group can claim contribution-based ESA to up to one year ... Subscribers only
Linking rule abolished (84 words)
Previously, when a claimant left ESA and started work or training within one month, their benefit would be reinstated at the same rate as previously ... Subscribers only
Severe Disablement Allowance and ESA (146 words)
Severe Disablement Allowance (SDA) was a state benefit for those below the state pension age who were assessed as being unable to work because of ... Subscribers only
Industrial Injuries Disablement Benefit (60 words)
If you have an accident at work, contract an industrial disease, or become deaf through your work, you should be able to claim Industrial Injuries ... Subscribers only
Who can get it? (223 words)
To qualify for IIDB, you must have been a paid employee when you suffered an injury or contracted an “industrial disease”, that is one of more ... Subscribers only
How much can you get? (180 words)
The level of benefit will depend on the extent of the disablement — the “percentage” disability. Total loss of sight or hearing or the loss of ... Subscribers only
How to appeal (47 words)
If you do not agree with the decision about your claim for IIDB, you can appeal (www.dwp.gov.uk/docs/gl24dwp.pdf). There are also several ... Subscribers only
Extra help for those claiming IIDB (186 words)
If your total disablement is 100% as a result of an industrial accident or disease, and you are so seriously disabled that you need constant care ... Subscribers only
Reduced Earnings and Retirement Allowance (160 words)
These benefits are only available to people who have had accidents that happened, or have diseases that started, before 1 October 1990. ... Subscribers only
Personal Independence Payment (86 words)
From 6 April 2013, a new benefit called Personal Independence Payment (PIP) replaces Disability Living Allowance (DLA) for disabled people aged 16 ... Subscribers only
Who can get it? (92 words)
The change from DLA to PIP affects people aged 16 to 64. ... Subscribers only
How much can you get? (105 words)
Payments will be made up of a daily living component and a mobility component. You could get money for one or both parts, at either a standard or ... Subscribers only
If you currently get DLA (107 words)
Most people currently claiming DLA won’t be affected before 2015. However, if your condition changes, or you reach the end of your existing DLA ... Subscribers only
New claims (117 words)
PIP will be introduced for new claims in parts of the north of England from 6 April 2013, and nationwide from June 2013. New claimants need to phone ... Subscribers only
Attendance Allowance (85 words)
This benefit is for people who become disabled after the state pension age, or who were disabled before that age but did not claim until after their 6 ... Subscribers only
Carer’s Allowance (251 words)
Carer’s Allowance (CA) is a taxable benefit available to informal carers aged 16 and over. You may qualify if you spend at least 35 hours a week ... Subscribers only
How much can you get? (66 words)
The basic rate of CA is £59.75 a week. You can also claim an adult dependency increase of £35.15 a week for your partner or someone who lives with ... Subscribers only
How to claim (29 words)
Contact the Carer’s Allowance Unit (0845 6084321) or Benefits Enquiry Line (0800 882200) for an application form DS700. CA can also be claimed ... Subscribers only
Chapter 4
4. SUPPORT FOR PARENTS-TO-BE AND PARENTS (68 words)
Benefits available to help parents and guardians raise their children ... Subscribers only
Parents-to-be (138 words)
Workers exercising their rights to maternity, paternity or adoption leave and pay have the right not to be dismissed for that reason. Additionally, ... Subscribers only
Statutory Maternity Leave (374 words)
As an employee you have the right to 26 weeks of Ordinary Maternity Leave and 26 weeks of Additional Maternity Leave, making one year in total. The ... Subscribers only
Returning to work (152 words)
Your employer should respond within 28 days to your notification of your intention to take maternity leave, and should tell you the date of your ... Subscribers only
Statutory Maternity Pay (114 words)
In addition to your right to maternity leave, you have the right to Statutory Maternity Pay (SMP) if ... Subscribers only
How much can you get? (159 words)
SMP amounts ... Subscribers only
How is it paid? (106 words)
SMP is paid by your employer on your normal pay dates. The employer can reclaim most of it through the National Insurance scheme. You are liable for ... Subscribers only
Maternity Allowance (50 words)
If you meet some but not all of the qualifying conditions for SMP, you may get Maternity Allowance (MA) instead. ... Subscribers only
Who can get it? (214 words)
There are currently three ways of qualifying for MA. ... Subscribers only
How to claim (65 words)
If you do not qualify for SMP, your employer has to give you an SMP1 form. You need to complete this and send it with form MA1 (available from your ... Subscribers only
Sure Start Maternity Grant (210 words)
The Sure Start Maternity Grant (SSMG) is intended to help you pay for the immediate needs of a new baby if you are getting a specified benefit or ... Subscribers only
Ordinary Paternity Leave and Ordinary Statutory Paternity Pay (307 words)
The partner of a woman on maternity leave, the biological father of her unborn child, the child’s adopter or the partner of the child’s adopter ... Subscribers only
Additional Paternity Leave and Pay (321 words)
Additional paternity leave (APL) is for a maximum of 26 weeks and can be taken, if your partner has returned to work, between 20 weeks and one year ... Subscribers only
Statutory Adoption Leave and Pay (366 words)
If you qualify, you have the right to 52 weeks of Statutory Adoption Leave. This is made up of 26 weeks of Ordinary Adoption Leave followed by 26 ... Subscribers only
Child Benefit (379 words)
Child Benefit is a tax-free payment that is aimed at helping parents cope with the cost of bringing up children. One parent can claim £20.30 a week ... Subscribers only
Guardian’s Allowance (86 words)
If you are looking after a child or children, both of whose parents have died (or if one has died and the other is absent for some other specified ... Subscribers only
Child Tax Credit (69 words)
You could get Child Tax Credit for each child you’re responsible for if they ... Subscribers only
How much can you get? (130 words)
You could get a basic amount and extra on top of this (known as elements). How much you get depends on things like your income and circumstances (e.g. ... Subscribers only
If your circumstances change (124 words)
Your tax credits can go up or down if your family or work life change. You must report these changes to the Tax Credit Office. For example, if your ... Subscribers only
If your child is disabled (50 words)
You may get extra Child Tax Credits ... Subscribers only
How to claim (59 words)
Contact the Tax Credit Helpline for a claim form (Telephone: 0345 300 3900; Textphone: 0345 300 3909). It can take up to two weeks to arrive. ... Subscribers only
Changes from 6 April 2013 (390 words)
From October 2013 Child Tax Credit and Working Tax Credit will be replaced by Universal Credit — a new single monthly payment for people in work ... Subscribers only
Chapter 5
5. BASIC STATE PENSION AND PENSION CREDIT (312 words)
Once you reach the State Pension age (currently 65 for men and rising from 60 to 65 for women), you may be able to claim a range of benefits to help ... Subscribers only
Basic State Pension (93 words)
From April 2011, the government introduced a triple guarantee that the Basic State Pension will rise by the highest of the ... Subscribers only
Who can get it? (254 words)
Your basic State Pension depends on the number of years you’ve paid National Insurance or got National Insurance credits, e.g. while unemployed or ... Subscribers only
Increased Basic State Pensions for married women, married men and civil partners (100 words)
If you’re not eligible for a basic State Pension or not getting the full amount, you might be able to qualify or top up to £66.00 through your ... Subscribers only
How to claim (65 words)
You should receive a claim form from the Pension Service four months before you reach state pension age. If you have not received it three months ... Subscribers only
Postponing the Basic Pension (54 words)
You can postpone drawing your retirement pension for an indefinite period after reaching the state Pension Age. This will increase the deferred ... Subscribers only
Over-80s pension and Over-80s addition (88 words)
If you are over 80 and are not entitled to the Basic Pension at all, or only to a proportion of the full rate (up to 60%), you can claim the ... Subscribers only
Additional State Pension (430 words)
The Additional State Pension is an extra amount of money you could get with your basic State Pension. It is based on your National Insurance ... Subscribers only
Pension Credit (433 words)
Pension Credit is a means-tested benefit which depends on your income and savings. It is designed to provide those over qualifying age (see below) ... Subscribers only
Pensioners who work and Universal Credit (125 words)
As Universal Credit replaces Housing Benefit (HB) and Child Tax Credit and is only for working-age people, pensioners who have costs of rent and ... Subscribers only
New state pensions reforms in 2016 (860 words)
The state pension overhaul, previously announced to start in 2017 will now begin in 2016. A flat-rate state pension of £144 will replace the ... Subscribers only
Winter Fuel Payment (164 words)
The Winter Fuel Payment is an annual payment of between £100 and £300 paid to pensioner households. The amount of Winter Fuel Payment that you can ... Subscribers only
Chapter 6
6. HELP WITH HOUSING COSTS (247 words)
The government has been focusing on Housing Benefit as a means of cutting public spending for some time. Over the past year or so, many changes have ... Subscribers only
Housing benefit (205 words)
From 1 April 2013, new rules will restrict eligible rent if you are considered to be under occupying your accommodation, the so-called “bedroom ... Subscribers only
How is Housing Benefit paid? (54 words)
From April-September 2013 housing benefit will begin to be paid as part of Universal Credit (UC) with the following ... Subscribers only
Local Housing Allowance (LHA) (495 words)
LHA is used to work out housing benefit for tenants in privately rented accommodation. You may be eligible for help with mortgage interest payments. ... Subscribers only
Chapter 7
7. HELP IF YOUR HUSBAND, WIFE OR CIVIL PARTNER DIES (113 words)
If your husband, wife or civil partner dies, you may be entitled ... Subscribers only
Bereavement Payment (104 words)
You can claim Bereavement Payment if your husband, wife or civil ... Subscribers only
How much do you get? (19 words)
The Bereavement Payment is a one-off, tax-free lump sum of £2,000 (unchanged since 2002). ... Subscribers only
How to apply (68 words)
You can make a claim over the telephone by contacting the Bereavement Service on 0845 608 8601. You can order a Bereavement Benefits pack (form BB1) ... Subscribers only
Bereavement Allowance (56 words)
You might be able to claim Bereavement Allowance if you are a widow, widower or surviving civil partner aged 45 (or over) until you reach State ... Subscribers only
How much do you get? (54 words)
The allowance is paid for 52 weeks from the death of your husband, wife or civil partner. The amount of the allowance varies according to your age ... Subscribers only
Widowed parent’s benefits (226 words)
Widowed parents can currently get monthly state benefits for up to 18 years until their children are grown up. Those over 45, childless and below ... Subscribers only
Impact on other benefits (85 words)
Income Support, Incapacity Benefit, Employment and Support Allowance, Carer’s Allowance, Jobseeker’s Allowance and Pension Credit are reduced by ... Subscribers only
Inheriting state pension entitlement (268 words)
Your widow, widower or surviving civil partner may be entitled to some basic State Pension based on your National Insurance (NI) contributions, but ... Subscribers only
Extra money from deferring your State Pension (105 words)
If you decided to defer your State Pension and built up an extra amount, your spouse or civil partner may either claim the extra State Pension or ... Subscribers only
Chapter 8
8. CALCULATING MEANS-TESTED BENEFITS (407 words)
Income Support (IS), income-based Jobseeker’s Allowance (JSA), Housing Benefit (HB) and Council Tax Benefit (CTB) are means-tested benefits that ... Subscribers only
Further information
Further help and information (749 words)
The state benefits system is run mainly by the Department for Work and Pensions (DWP), while HM Revenue & Customs (HMRC) administers tax credits. ... Subscribers only