Select Committee on Social Security Appendices to the Minutes of Evidence


Annex B

ENTITLEMENT TESTS AND MAIN CHARACTERISTICS OF RELEVANT CONTRIBUTORY AND INCOME RELATED BENEFITS


BenefitConditions Weekly Amount

Basic Retirement Pension1.  One qualifying year[2] since 6 April 1975 which is derived from the actual payment of Class 1, 2 or 3 contributions; or 50 flat-rate contributions paid at any time before 6 April 1975; and
2.  Full-rate (100 per cent) Basic Pension: about 90 per cent of the years in an individual's working life[3] must be qualifying years. For the minimum Basic Pension payable (25 per cent), 9 or 10 of the years in an individual's working life must be qualifying years.
Full pension:
Own contributions or late spouse's contributions:
£66.75
Spouse's contributions:
£39.75
Minimum pension: 25 per cent full pension
Additional Pension
(also known as the
State Earnings Related Pension—SERPS)
Accrue SERPS in any year where an employee pays Class 1 NICs on earnings between the Lower Earnings Level and Upper Earnings Level. Aim is to have a pension of 20 per cent of average earnings over full working life. Earnings related: maximum weekly rate
around £120
Incapacity Benefit1.  Class 1 contributions paid on earnings and/or Class 2 contributions paid equal to at least 25 x Lower Earnings Limit (LEL) in any one tax year; and
2.  Class 1 contributions paid on earnings and/or Class 2 contributions paid and/or
Class 1 credits equal to at least 50 x LEL in both of last two tax years before claim starts.
First 28 weeks: £50.35
Weeks 29-52: £59.55
Long-term rate: £66.75
Age additions (with long-term rate only):
incapacity started before age 35: £14.05
Incapacity started age 35-44: £7.05
Disability Working AllowanceAged 16 or over.
Working for 16 hours or more a week.
Having an illness or a disability which puts them at a disadvantage in getting a job.
Having one of a list of qualifying benefits for disability.
Must not have savings over £16,000.
Must be a resident and present in GB at the date of claim and not subject to restrictions.
Amount dependent on the make up of family, their income and capital.
Weekly rates from April 1999.
—  Single person: £51.80
—  Couple/lone parents £81.05
Child Allowance:
—  From birth: £15.15
—  11-15: £20.90
—  16-18: £25.95
Disabled Child Allowance: £21.90
30 Hour Allowance: £11.05
Earnings Threshold:
—  Single Person: £60.50
—  Couple/Lone parent: £80.65
For every £1 of normal weekly income higher than the earnings threshold 70p is deducted.
Income of £1 assumed for every £250 of savings between £3,000-£16,000.
NOTE:
From October 1999 DWA will be replaced by the Disabled Person's Tax Credit (DPTC) and will be administered by the Inland Revenue.
Jobseeker's Allowance (contribution-based) 1.  Class 1 contributions paid on earnings equal to at least 25 x Lower Earnings Limited (LEL) in respect of one of the last two complete tax years before the beginning of the relevant benefit year; and
2.  Class 1 contributions paid on earnings and/or Class 1 credits equal to at least 50 x LEL in both of last two tax years before the beginning of the relevant benefit year.
Age under 18: £30.95
Age 18-24: £40.70
Age 25 +: £51.40
Jobseeker's Allowance.
(Income-based)
Must be actively seeking work, be capable of work, be available for work, normally be at least 18 years old and under pension age and have income and savings below certain level. Personal allowances
Lone parent aged under 18: £30.95
Lone parent under 18 (higher): £40.70
Lone parent aged 18 or over: £51.40
Couple one 18 or over: £80.65
Dependent children
Birth to September following 11th birthday: £20.20
From September following 11th birthday to September following 16th birthday: £25.90
From September following 16th birthday to day before 19th birthday: £30.95
Premiums
Family: £13.90
Family (lone parent rate): £15.75
Disabled child: £21.90
Disability (single): £21.90
Disability (couple): £31.25
Severe disability (lower): £39.75
Severe disability (higher): £79.50
Income Support1.  Claimants must fall within certain groups eg lone parents, sick, disabled, over 60 years of age, carers and
2.  Have income lower than assessed needs and
3.  Not in remunerative work, (16 hours for the claimant, 24 for their partner) and
4.  Have capital under £8,000.
Personal Allowance
Single under 18: £30.95
Single 18 higher: £40.70
Single aged 18-24: £40.70
Single aged 25+: £51.40
Lone parents under 18: £30.95
Lone parents under 18 (higher): £40.70
Lone parents aged 18 or over: £51.40
Couple one 18 or over: £80.65

Dependant Children
Birth to September following 11th birthday: £20.20
From September following 11th birthday to September following 16th birthday: £25.90
From September following 16th birthday to day before 19th birthday: £30.95
(Note: As part of the Budget proposals the under 11 rate is to be increased by £4.70 from October 1999.)
Premiums
Family: £13.90
Family (Lone parent rate): £15.75
Disabled Child: £21.90
Pensioner
Single: £23.60
Couple: £35.90
Enhanced Pensioner
Single: £25.90
Couple: £39.20
Higher Pensioner
Single: £30.85
Couple: £44.65
Disability
Single: £21.90
Couple: £31.25
Severe Disability
Lower: £39.75
Higher: £79.50
Carer: £13.95

Mortgage Interest—in certain
circumstances a contribution may also be made towards the payment of mortgage interest dependent upon the amount of allowable mortgage outstanding and the rate of interest charged.
Housing benefit(1)  Legal liability to pay rent and occupies dwelling as their home.
(2)  Have a low income.
Up to 100 per cent of eligible rent.
Amount based on comparison of needs with resources broadly in line with Income Support assessment.
Amounts above IS levels reduced by 65p for each additional £1 of income.
Council Tax Benefit(1)  Legal liability to pay rent and occupies dwelling as their home.
(2)  Have a low income.
Based on comparison of needs with resources broadly in line with Income Support assessment.
Amounts above IS levels reduced by 20p for each additional £1 of income.
Widow's Benefit (includes Widow's Pension and
Widowed mother's Allowance)
Widow's Pension is
taxable as is the
personal element of
Widowed Mother's Allowance.
Full Pension: £66.75
An age-related pension is paid if the woman was widowed between age 45 and 55.
Minimum pension: 25 per cent full pension.
Lump sum payment: £1000
Statutory Sick
Pay (paid by
employer)
Average earnings in 8 weeks before sickness must be at least Lower Earnings Level. Standard rate: £59.55
Statutory Maternity Pay
paid by
employer and
largely reimbursed by
DSS)
Employee continuously employed by employer for at least 26 weeks ending 15th week before expected week of confinement; and had average weekly earnings of at least the Lower Earnings Level. Higher rate: 90 per cent of average earnings
Lower rate: £59.55
Maternity AllowanceClaimants must have worked and paid standard rate Class 1 or Class 2 National Insurance Contributions in at least 26 weeks of the 66 weeks before the expected week of confinement. Higher rate: £59.55 for employees
Lower rate: £51.70 for others (self employed, unemployed and non-employed).




2   A qualifying year is a tax year in which the contributor has received (or is treated as having received) qualifying earnings on which contributions have been paid of at least 52 times the LEL. Qualifying earnings are those on which full rate Class 1 contributions have been paid: each Class 2 or Class 3 contribution counts as one week's earnings at LEL. Back

3   A working life is the period over which a person has to meet the contribution conditions for Basic Pension. It is counted from the start of the tax year in which a person reached 16 to the end of the last full tax year before they reached State Pension Age. Back


 
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Prepared 2 November 1999