Thursday, 3 February 2011

10 of the Most Costly UK Benefits


Below is an updated list of the most expensive/costly UK Benefits:

-Tax Credit
-Child Benefit
-Income Support
-Council Tax Benefit
-Carer's Allowance
-Jobseekers Allowance
-Incapacity Benefit
-Housing Benefit
-Statutory Maternity Pay
-Disability Living Allowance

Below is a graph which outlines the cost of each benefit listed above.

The TAX CREDIT BENEFIT is under review and is estimated to cost annually £23.7 Billion. Majority of families living in the UK qualify for child tax credits and a number of people on Low Incomes may be eligible for Tax Credit.

The sum paid will depend mostly on the amount that is earned from employment and other personal circumstances like number of children and amount paid to childcare if any.

There were changes announced in June last year which are meant to come into affect in April 2011, The current benefit situation is as follows, a family with children and a yearly income of up to 50,000 GBP receive 545 GBP per year.

As income levels increase to over 50,000 GBP the benefit payments are reduced accordingly.

From April 2011 the 50K GBP limit will be reduced to 40k GBP and the payment rate will be considerably increased.

The CHILD BENEFIT costs £11.2 Billion annually and all parents are currently elegible for this tax-free payment which is about 20.30 GBP paid per week for the oldest child and 13.40 GBP per other child.

This payment is valid up to the age of 19 for full-time students in the UK and currently it is estimated that 7.7 Million families receive this annually.

It has been announced that this Benefit will be scrapped from 2013for Higher Rate Taxpayers in the UK and should save around 1 Billion GBP.

The INCOME SUPPORT BENEFIT costs around £7.5 Billion annually and is currently under review. This benefit is paid to individuals on low incomes who do not have to register as unemployed. Eligibility requirements for this benefit states that people aged 16-59 that work less than 16 hours per week, have a low income, with not more than 16,000 savings.

The weekly allowance for people aged 16-24 is 50.95 GBP and 64.30 GBP for people aged 25 and over.

COUNCIL TAX BENEFIT is for people on low incomes and intended to help pay for council tax (local property tax in the UK) The annual cost is £2.5 billion.

You do not have to be working in order to receive this and in general people with over 16,000 GBP in savings, Asylum Seekers and people sponsored in the UK.

CARERS ALLOWANCE is currently under review and costs annually £1.5 billion. This type of benefit is meant for people who look after/care for a disabled person. There is no requirement to be related or live with the disabled person BUT there is an age requirement of 16 years and older and a minimum of 35 hours per week in order to receive the 53.90 GBP weekly rate.

JOBSEEKERS ALLOWANCE is currently under review and costs £3.7 billion annually. This benefit was initially introduced in 1996 and is intended for people that are out of work or that work less than 16 hours per week.

In order to receive this benefit people have to register at their local job-center every two weeks.

INCAPACITY BENEFIT is currently under review and costs £6.2 Billion.
This is a weekly payment for people that cannot work due to illness or disability and who are under the pension age.

Incapacity Benefit was replaced by EMPLOYMENT AND SUPPORT ALLOWANCE (ESA)and is for people that were ill or disabaled after 27 October 2008 and will be phased out by 2014.

HOUSING BENEFIT is currently under review and costs £21.5 Billion annually. This benefit is aimed at people who are on lower incomes and need help paying for the rent.

There are a number of limitations which include people with over 16,000 GBP savings, people living in the home of a relative or full time students and asylum seekers.

In June 2010 The UK Govt capped the weekly payments at 280 GBP for a flat and 400 GBP for those people living in a house.

STATUTORY MATERNITY PAY is under review and cost £1.8 Billion annually.

This benefit is for women that need to take time off work before and after their baby is born. Women in the UK are entitled to a year off with the 1st six week period on a 90% pay rate, which is then followed by 33 weeks on STATUTORY MATERNITY PAY of approximately 125 GBP per week. The remaining period is left unpaid.

In order to claim this benefit it is essential that you have been employed by the same employer for a continuous 26 week period and people applying have to earn at least 97 GBP per week so that National Insurance contributions apply.

DISABILITY LIVING ALLOWANCE benefit is paid to disabled people who require someone to look after them or who have difficulties with walking, Blind people and people with other mental or physical disabilities may be eligible.

There have been reports that there are no plans set to reduce the DISABILITY LIVING ALLOWANCE but a newer harsher medical assessment is set to be introduced from 2013.

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