Full details of tax and benefits can be found on the Directgov website http://www.direct.gov.uk/en/MoneyTaxAndBenefits/index.htm
National Minimum Wage (NMW)
The age at which you become entitled to the main rate was reduced from 22 to 21 on 1 October 2010. The apprentice rate was introduced on the same date. If you are of compulsory school age you are not entitled to the NMW. Some of your other employment rights are also different.
Rates from 1 October 2011
The NMW rates are reviewed each year by the Low Pay Commission and from 1 October 2011:
the main rate for workers aged 21 and over will increase to £6.08
the 18-20 rate will increase to £4.98
the 16-17 rate for workers above school leaving age but under 18 will increase to £3.68
the apprentice rate, for apprentices under 19 or 19 or over and in the first year of their apprenticeship will increase to £2.60
Winter fuel payment
There is a reduction of £50 in the winter fuel payment for the winter of 2011/12
Situation Born on or before Aged 80 or over on or
5 January 1951 before 25 Sept. 2011
Live alone £200 £300
Only person who qualifies £200 £300
Another qualifying individual who is under 80 £100 £200
Another qualifying individual who is 80 or over £100 £150
Housing Benefit Cuts
Private rental housing benefit is limited to either the cheapest 30% of rental properties in an area or capped
A cap of £250 for a one-bedroom property
A cap of £290 for a two-bedroom property
A cap of £340 for a three-bedroom property
A cap of £400 for a four-bedroom property
Previously private rental housing benefit was limited to the average rent in a Broad Rental Market Area with no cap. Most of the tenants are like to be worse off by at least £40 per month or £9 per week.
The changes took effect from 1 April 2011 for new claimants and for existing claimants they will take place after the anniversary of the date of the first claim. The Local Housing Allowance rates as at July 2011 for the three Broad Rental Market Areas of South Northamptonshire District Council are as follows.
Weekly rates
Number of Category Broad rental market area
bedrooms Northampton Cherwell Milton Keynes
Shared room A £60.00 £69.23 £68.27
1 bedroom B £92.31 £110.20 £114.23
2 bedrooms C £115.38 £144.23 £144.23
3 bedrooms D £132.69 £173.08 £167.31
4 bedrooms E £183.46 £219.23 £219.23
5 bedrooms F Not eligible Not eligible Not eligible
Tax credit change could cost families £4k a year (BBC News 11 February 2012)
Shadow chief secretary to the Treasury Rachel Reeves : 'This is the wrong policy at the wrong time for thousands of families'
Low income families with parents in part-time work could lose nearly £4,000 per year because of a change in tax credits, the Labour Party says. Families can currently qualify for Working Tax Credit if one parent works at least 16 hours a week. About 212,000 families could be hit from April 2012 when the threshold is raised to 24 hours per week, the official data highlighted by Labour shows.
Couples can apply for the credit as long as they make a joint claim. However the money will be paid to the person who works part-time. There is a basic amount available for each application, and then additional elements depending on whether you have applied as a couple or as a lone parent.
Working and child tax credit rates and thresholds
Description | 2010-11 | 2011-12 | Change |
£ per year | £ per year | £ per year | |
Working tax credit | |||
Basic element | 1920 | 1920 | 0 |
Couple and lone parent element | 1890 | 1950 | 60 |
30 hour element | 790 | 790 | 0 |
Disabled worker element | 2570 | 2650 | 80 |
Severe disability element | 1095 | 1130 | 35 |
50 plus element, 16-29 hours | 1320 | 1365 | 45 |
50 plus element, 30+ hours | 1965 | 2030 | 65 |
Child care element | |||
Maximum eligible cost for one child | £175 per week | £175 per week | 0 |
Maximum eligible cost for two or more children | £300 per week | £300 per week | 0 |
Percentage of eligible cost covered | 80% | 70% | -10% |
Child tax credit
Description | 2010-11 | 2011-12 | Change |
£ per year | £ per year | £ per year | |
Family element | 545 | 545 | 0 |
Child element | 2,300 | 2,555 | 255 |
Disabled child element | 2,715 | 2,800 | 85 |
Severely disabled child element | 1,095 | 1,130 | 35 |
Income thresholds and withdrawal rates | |||
First income threshold | 6,420 | 6,420 | 0 |
First withdrawal rate (percent) | 39% | 41% | -2% |
Second income threshold | 50,000 | 40,000 | -10,000 |
Second withdrawal rate (percent) | 6.67% | 41% | -34.33% |
First threshold for those entitled to | |||
Child tax credit only | 16,190 | 15,860 | -330 |
Income disregard | 25,000 | 10,000 | -15,000 |
Income tax
Description | 2010-11 | 2011-12 | Change |
£ per year | £ per year | £ per year | |
Income tax allowances | |||
age under 65 | 6,475 | 7,475 | 1,000 |
age 65 - 74 | 9,490 | 9,940 | 450 |
age over 75 | 9,640 | 10,090 | 450 |
Married couples allowance | |||
Maximum amount | 6,965 | 7,295 | 450 |
Minimum amount | 2,670 | 2,800 | 80 |
Income limits for | |||
under 65 personal allowance | 100,000 | 100,000 | 0 |
age related allowances | 22,900 | 24,000 | 1,100 |
Blind persons allowance | 1,890 | 1,980 | 90 |
Married couples allowance (born before 6 April 1935 – Tax relief is restricted to 10%)
Band for taxable income
Description | 2010-11 | 2011-12 | Change |
£ per year | £ per year | £ per year | |
Band for taxable income | |||
Basic rate (20 percent) | 0 - 37,400 | 0 - 35,000 | -2,400 |
Higer rate (40 percent) | 37,400 - 150,000 | 35,001 - 150,000 | -2,400 |
Additional rate (50 percent) | Over 150,000 | Over 150,000 |
Welfare Reform Bill
The Welfare Reform Bill plans to:
replace a number of benefits and credits with a Universal Credit
introduce a cap, linked to average weekly earnings, which will limit the amount of benefits a household can get
make benefits conditional
introduce a new Personal Independence Payment for disabled people – this will involve an assessment to target support at those who really need it
create a new system of child support which puts the interest of the child first
New powers to tackle the problems of fraud and error will also be introduced.
The new measures include tougher one-strike, two-strike and three-strike rules, with a benefit ban of three years for people who offend repeatedly.
A single investigation service and a new mobile regional taskforce will be set up to investigate each and every claim in high fraud areas. Penalties of £50 for more minor offences will also be introduced.
Universal credit will be paid to people both in and out of work, replacing working tax credit, child tax credit, housing benefit, council tax benefit, IS, income based JSA and income-related ESA. It will provide support for people between 18 (or younger in specific circumstances) and the age at which the claimant becomes eligible for state pension credit. It will include a standard allowance (to cover basic living costs) along with additional elements for responsibility for children or young persons, housing costs and other particular needs
Migration expected to start in 2013 - People claiming benefits will be automatically moved on to Universal Credit from 2013.
Works and Pensions Secretary, Iain Duncan Smith, sets out next steps for moving claimants onto Universal Credit (DWP website 1 November 2011)
Over one million people will be claiming Universal Credit by April 2014 Work and Pensions Secretary Iain Duncan Smith announced today as he set out the Government timetable to move 12 million claimants onto the new benefit by 2017.
From October 2013 Universal Credit will replace Jobseekers Allowance, Employment Support Allowance, Housing Benefit, Working Tax Credit and Child Tax Credit. The transition from the old benefit system to Universal Credit will take place in three phases over four years, ending in 2017 affecting 7.7m households.
Between October 2013 and April 2014 – About 500,000 new claimants will receive Universal Credit and at the same time a further 500,000 existing claimants (and their partners and dependants) will also move on to Universal Credit as and when their circumstances change significantly, such as when they find work or when a child is born.
From April 2014 the second phase will give priority to households who will benefit most from the transition such as those Working Tax Credit claimants who currently work a small number of hours a week but could work more hours allowed under Universal Credit. Overall 3.5 million existing claimants (and their partners and dependents) will be transferred onto Universal Credit during this second Phase.
The last and final phase, which begins at the end of 2015 and runs through to the end of 2017, will see around 3 million households being transferred to Universal Credit by local authority boundary with a focus on safeguarding financial support, such as Housing Benefit payments to claimants as the old benefit system winds down.
Who can get Jobseeker's Allowance?
To get Jobseeker's Allowance you must be:
available for, capable of and actively seeking work
aged 18 or over but below State Pension age
working less than 16 hours per week on average, depending on the amount of your wage
in Great Britain
Jobseeker's Allowance isn't normally paid to 16 or 17 year olds, except in special cases.
If you’re a man who has reached the Pension Credit qualifying age, you may be able to claim Pension Credit. Contact Jobcentre Plus for advice. The minimum age you can get Pension Credit is gradually increasing to 65 alongside the increase in women’s State Pension age.
The government has announced proposals for increasing State Pension age. Under the new proposals, women’s State Pension age will increase more quickly to 65 between April 2016 and November 2018. Between December 2018 and April 2020, the State Pension age for men and women will increase from 65 to 66.
Changes to the State Pension age are likely to affect the Pension Credit qualifying age.
How it works
There are two types of Jobseeker's Allowance, 'contribution-based Jobseeker's Allowance' and 'income-based Jobseeker's Allowance'.
Contribution-based Jobseeker's Allowance
You may be entitled to claim contribution-based Jobseeker's Allowance if you have paid enough National Insurance contributions (NICs). Jobcentre Plus can pay this for up to 182 days. Generally, self-employed contributions will not help you qualify for contribution-based Jobseeker’s Allowance.
Income-based Jobseeker's Allowance
This is based on your income and savings. You may get this if you have not paid enough NICs (or you've only paid contributions for self-employment) and you're on a low income.
Contribution-based Jobseeker's Allowance
The maximum weekly rates are:
Age Weekly amount
Aged 16 - 24 £53.45
Aged 25 or over £67.50
Income-based Jobseeker's Allowance
The maximum weekly rates are:
Type of person Weekly amount
Single people, aged under 25 £53.45
Single people, aged 25 or over £67.50
Couples and civil partnerships (both aged 18 or over) £105.95
Lone parent (aged under 18) £53.45
Lone parent (aged 18 or over) £67.50
For income-based Jobseeker’s Allowance, the amount may be less after your household income, pension and any savings of £6,000 or more are taken into account.
Who can get Employment and Support Allowance
You may be able to claim Employment and Support Allowance if any of the following apply to you:
your Statutory Sick Pay has ended, or you cannot get it
you are self employed or unemployed
you have been getting Statutory Maternity Pay (SMP) and have not gone back to work for your employer because you have an illness or disability which affects your ability to work
you are under State Pension age
You must also either:
have had an illness or disability which affects your ability to work for at least four days in a row (including weekends and public holidays)
be unable to work for two or more days out of seven consecutive days
be getting special medical treatment
If you are aged between 16 and 20 (or under 25 if you were in education or training at least three months immediately before turning 20), you must:
have been too ill to work because of an illness or disability for at least 28 weeks (this limitation only applies to contribution-based Employment and Support Allowance, but you may still be eligible for income-based Employment and Support Allowance)
have been too ill to work before you turned 20 (or 25 if you were in education or training at least three months immediately before turning 20)
Entitlement conditions
There are two types of Employment and Support Allowance:
contribution-based
income-related
Contribution-based Employment and Support Allowance
You may be entitled to claim contribution-based Employment and Support Allowance if you have paid enough National Insurance contributions.
Income-based Employment and Support Allowance
You may be entitled to claim income-based Employment and Support Allowance if you do not have enough money coming in, or you have not paid enough National Insurance contributions, and you satisfy the entitlement conditions.
This means that you have savings of less than £16,000 and, if you have a partner or civil partner, they work for less than 24 hours a week on average.
Rates
Weekly rate during the assessment phase
The assessment phase rate is paid for the first 13 weeks of your claim while a decision is made on your capability for work through the Work Capability Assessment.
Age of claimant Weekly amount
A single person aged under 25 up to £53.45
A single person aged 25 and over up to £67.50
Weekly rate during the main phase
The main phase starts from week 14 of your claim, if the Work Capability Assessment shows that your illness or disability does limit your ability to work.
Type of group Weekly amount
A single person in the Work Related Activity Group up to £94.25
A single person in the Support Group up to £99.85
In most cases you will not get any money for the first three days of your claim. These are called 'waiting days'.
Depending on your circumstances you may be able to get more money if you get income-related Employment and Support Allowance.
You can only get extra money for your husband, wife or civil partner if you get income-related Employment and Support Allowance.
Who can get Income Support
It's for people who all the following apply to:
are between age 16 and the age they can get Pension Credit
have a low income
work less than 16 hours a week, depending on the amount of your wage
aren't in full-time study (but there are some exceptions)
don't get Jobseeker's Allowance or Employment and Support Allowance
don't have savings above £16,000
live in Great Britain
You may get Income Support if you are one of the following:
a parent
on parental or paternity leave
a carer
a refugee learning English who arrived less than a year ago
Young people in relevant education may also get Income Support. Generally this means full-time education up to GCE A-level or Scottish Certificate of Education (Higher level). This might apply if you:
are a parent
don't live with a parent or someone acting as a parent
are at serious risk of abuse or violence
are a refugee learning English
You can get Income Support as well as some other benefits.
Contact Jobcentre Plus to find out more.
How much you can get
The amount of Income Support you can get is made up of three different parts:
personal allowances
premiums
payments to cover certain housing costs
The amount of the personal allowances are shown in the table below:
Type of person Weekly amount
Single person
Aged 16 to 24 £53.45
Aged 25 or over £67.50
Lone parent
Aged 16 to 17 £53.45
Aged 18 or over £67.50
Couple
With both people under 18 £53.45
With one person under 18 and the other aged 18 to 24 £53.45
With one person under 18 and the other aged 25 or over £67.50
With both people aged 18 or over £105.95
For Income Support, the amount may be less after your household income, pension and any savings of £6,000 or more are taken into account. To get a better idea of how much Income Support you may get, use the online benefits adviser.