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  • Understanding Benefits

    Added: 24 April 2014

    Jobseeker’s Allowance (JSA)

    JSA is a benefit for people who are unemployed but capable of work. Other entitlement conditions include being:

    • 16 or over and under state pension age (16-17 year olds must not be in full-time education)
    • actively seeking full-time work (16 hours or more per week)
    • resident in theUK.


    There are two types of JSA:

    • JSA(C) – based on the amount of national insurance contributions the customer has paid in the previous two years
    • JSA (IB) – based on income and savings for customers who have not paid enough national insurance contributions.


    The amount and type(s) of JSA a customer is entitled to may also be affected by any dependants they have or the circumstances of a partner.


    Employment and Support Allowance (ESA)

    ESA is a benefit for people who:

    • cannot work because of sickness or disability, and
    • are not receiving Statutory Sick Pay (SSP).
    • It was introduced in 2008 to replace Incapacity Benefit (IB) and Income Support (IS) claimed on the basis of incapacity.


    As with JSA, there are two types of ESA:

    • ESA(C) - customer can receive this if they have paid enough national insurance contributions
    • ESA(IR) – customers can receive this if their income and capital are below a certain level.


    In certain circumstances, customers can receive a combination of both types of ESA. However, to receive either type of ESA, the customer normally has to be assessed to determine if they have limited capability for work.


    This assessment may result in some customers being required to take appropriate steps to prepare themselves for work in order to continue to receive, or no longer be entitled to, ESA.


    Income Support (IS)

    IS is a non-contributory, income based benefit for people16 or over and under 60 who, under benefit law, do not have to be available for work because they are:

    • sick or disabled (pre-ESA cases)
    • looking after a disabled person
    • a lone parent responsible for a child under seven.

    IS is an important benefit because once entitlement is granted, the customer can automatically receive maximum Housing Benefit (HB) and Council Tax Benefit (CTB) and additional help, for example, with health costs.


    State Pension (SP)

    SP is available to people who:

    • are of state pension age (currently 60 for women and 65 for men), and
    • have paid sufficient national insurance contributions.


    SP can be paid when someone reaches state pension age or can be deferred, so that the customer receives the arrears at a later date either as a lump sum or as an increased weekly pension rate.


    Pension Credit (PC)

    PC is a benefit for people aged 60 or over and is based on the amount of money that they have coming in. It can be claimed:

    • whether or not the customer is still working
    • whether or not the customer has paid any national insurance contributions
    • by the customer and their partner.


    PC is made up of two elements:

    • Guarantee Credit – this ensures that people aged 60 and over have a minimum level of weekly income
    • Savings Credit – this is awarded to people aged 65 and over, who have modest income or savings.


    Customers may be entitled to either credit or a combination of both.


    Disability Living Allowance (DLA)

    DLA is a non-contributory, non-income based benefit for people under 65 who have personal care needs or difficulty walking because of either a physical or mental disability. It is made up of care and mobility components.


    Attendance Allowance (AA)

    AA is a benefit for people with care needs who:

    • are 65 or over, and
    • do not receive DLA.


    AA is paid at either a lower or higher rate.


    Carer’s Allowance (CA)

    CA is a non-contributory, non- income based benefit for people who are giving regular and substantial care to disabled people in their own homes. The disabled person must be in receipt of a specified level of either AA or DLA.


    Incapacity Benefit (IB)

    IB is a contributory, non-income based benefit, paid to people who are too sick or disabled to work. Although IB is still in payment to some customers, it can no longer be claimed as it was replaced by ESA in 2008.


    Industrial Injuries Disablement Benefit (IIDB)

    IIDB is a benefit for people who are disabled because of an accident at work, or who have certain diseases caused by their working environment.


    Child Benefit (CHB)

    CHB is a benefit forUKresidents who are responsible for a child under 16 or a young person under 20 who is still in full-time education up to A-Level or on a certain approved training course.


    Tax Credits

    There are two types of tax credit, both administered by Her Majesty’s Revenue and Customs (HMRC). These are:

    • Child Tax Credit - a payment available to people responsible for a child or young person, who have income below a certain amount. The amount the customer receives depends on how many children they have and whether they have any disabilities
    • Working Tax Credit - a payment available to top-up earnings of people working on low incomes, including those that do not have children. Extra amounts are payable if the customer has a disability, works 30 hours or more a week or has childcare costs.


    Housing Costs

    Benefit assistance with housing costs can take the form of:

    • Council Tax Benefit – the Government has made provision for the abolition of Council Tax Benefit (CTB), by virtue of the Welfare Reform Act 2012. New, localised Council Tax reduction (CTR) schemes have been introduced from 1 April 2013 as outlined in the Local Government Finance Act 2012. CTR schemes will not be a Department for Work and Pensions (DWP) Social Security benefit. After 31 March 2013, no further CTB overpayments can arise but prior overpayments can and will be identified.
    • Housing Benefit (HB) - for people on a low income to help them pay their rent. The customer may be entitled to HB if they are receiving benefits, or work part-time or full-time but receive a low income.


    Link to Universal Credit overview - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/253978/uc-making-your-claim.pdf

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