The Benefits System

This is the second article in a series from Alan Robinson on the benefits system as it relates to be a general introduction to the system as a whole and it therefore covers some benefits which are inappropriate for an elderly client. These have been included in the interests of completeness and may be of general interest.

The benefit system which we have today is based on that introduced after the Second World War. There is now a much wider range of benefits than was envisaged by the founders of the welfare state; but the basic outline can still be seen.

The original welfare state was largely based around the concept of national insurance. This was a system whereby a person would pay contributions towards a central pool when he or she was in work. When income from work was interrupted or terminated - by unemployment, sickness, maternity, widowhood, retirement or death - a benefit - often referred to as a contributory benefit - would be payable as compensation.

Contributory Benefits

The present contributory benefits are Contributory Jobseekers Allowance, Incapacity Benefit, Maternity Allowance, Widows Pension, Widowed Mothers Allowance, and Retirement Pension. All these benefits are obtainable from the local office of the Benefits Agency, except Contributory Jobseekers Allowance which is claimed by claim form available from a job centre. Contributory Jobseekers Allowance is payable for six months to someone who is signing on for work, provided they are not earning too much from part-time earnings - a departure from the usual rule, which is that contributory benefits are not means tested. Incapacity Benefit is payable to someone who is incapable of work because of illness or disability, provided they do not qualify for Statutory Sick Pay (see below) from an employer .Incapacity Benefit is payable at three rates, a short-term lower rate for the first 28 weeks, a short-term higher rate for the next 24 weeks, and a long-term rate thereafter. Both these benefits cease at 65.

There are three widows benefits, which are payable only to widows under the age of 60. The Widows Payment is a lump sum of £1000. If the widow has a dependent child or children - that is, a child for whom she gets Child Benefit - she will then be paid a weekly benefit known as Widowed Mothers Allowance until her youngest child becomes independent. If she has no dependent children, then she can claim a Widows Pension provided she is at least 45 years old. She will only get a full Widows Pension if she is at least 55 when she qualifies; if she is between 45 and 55, she will get a percentage of the full amount. She will also qualify for a Widows Pension if she is aged at least 45 when her Widowed Mothers Allowance expires. All widows benefits are based on the late husband's contributions, and entitlement ceases on remarriage or cohabitation (but not divorce). There is no equivalent benefit for a widower. Although this has been challenged in the European Court of Human Rights, it will be several years before a decision is known.

A woman who is not qualified for Statutory Maternity Pay (see below) can claim Maternity Allowance for up to 18 weeks during or after her pregnancy.

The Retirement Pension will be considered in detail in the next article. Suffice it to say that there are different categories of pension. Category A is payable on ones own contributions and is the pension normally payable to a man who has a full record of either paid contributions or credits during his working life. A woman with a full set of contributions will also be able to claim a Category A pension on her own contributions; but many women do not have full contributions, either because they have spent several years bringing up children or caring for a sick or disabled relative, or because they have paid a married womans contribution for part of their working life. In this case a woman may be able to claim either a partial Category A pension on her own contributions, or a Category B pension based on her husband's contributions. However, the latter cannot be paid until the husband reaches 65 or dies under that age. These then are the contributory benefits. Space does not permit examination of the contribution system, but there are many useful reference works on the market which will do so.

Non-Contributory Benefits

One of the problems with an entirely contributory system is that not everyone can or does work in order to pay the contributions - for example people who are disabled from birth or childhood, or single parents or carers who are unable to take up a job. In the 1970s it became apparent that the national insurance system was not able to cope with such people, who were therefore left to rely on means-tested benefits, so a series of non-contributory benefits was introduced - Attendance Allowance, Mobility Allowance, Non-Contributory Invalidity Pension (NCIP), and Invalid Care Allowance.

This original structure has been changed in a number of respects. Attendance Allowance still exists as a benefit for people over 65, while for those under that age, the former benefits of Attendance and Mobility Allowance have been combined and expanded to form Disability Living Allowance. Invalid Care Allowance remains in substantially the same form, that is as a benefit which may be claimed by a person who is caring for someone on Attendance Allowance or some variants of Disability Living Allowance. NCIP has become Severe Disablement Allowance, with additional qualifications.

These benefits will be looked at in detail when we consider disability benefits, but a short summary of Attendance Allowance and Disability Living Allowance (DLA) may be useful. There are four circumstances in which a person can claim Attendance Allowance: if they require frequent attention throughout the day in connection with their bodily functions; if they require prolonged or repeated attention at night in connection with their bodily functions; if they require continual supervision throughout the day to prevent substantial danger to themselves or anyone else; or if they require someone to be awake at night for a prolonged period or at frequent intervals for the purpose of watching over them. These are sometimes described as "the day conditions" and "the night conditions". Anyone who fulfils one or both of the day conditions, or one or both of the night conditions, is paid benefit at a lower rate; anyone who fulfils both a day condition and a night condition (in any combination) receives the higher rate of benefit.

Disability Living Allowance has three "care components". The first two are the same as for Attendance Allowance, and give two different rates of benefit, the higher and the middle care rate. The third covers a person who needs a lesser degree of help during the day, who receives the lower care rate. There are also two "mobility components". Someone who is unable or virtually unable to walk receives the higher mobility rate; someone who can walk but requires help in getting about gets the lower rate.

Both DLA and Attendance Allowance are dealt with by a special unit at Blackpool. Invalid Care Allowance is dealt with by a unit at Preston, and Severe Disablement Allowance (being closely related to Incapacity Benefit) is dealt with by the local benefits agency office. The claim form for DLA or Attendance Allowance, as anyone who has completed one will testify, is long and complicated, but careful attention to its completion will often pay dividends. There is always the possibility that a claimant will be awarded a lower rate of benefit than he or she is entitled to. For this reason, it is important to emphasise that both benefits are payable, not on the basis of the help which a person actually receives, but on the basis of the help they need.

Income-related Benefits

The third group of benefits consists of the income-related, or means-tested, benefits. There are six; Income Support, Income-based Jobseekers Allowance, Family Credit, Housing Benefit, Council Tax Benefit, and Disability Working Allowance. All of these benefits take account of the income and capital of the claimant, and (where appropriate) his or her family.

Contributory and non-contributory benefits are payable to an individual, depending on whether he or she fulfils the conditions. If there are dependents, there may be additional benefit available for them. In the case of income-related benefits, however, the benefit is payable on the basis of the circumstances of the whole family, and is calculated for them all together. A family, for this purpose, consists of the claimant, his or her partner, and any dependent children.

A partner, for this purpose, is anyone with whom the claimant lives "as husband and wife", whether they are married or not. As we saw in the last article, a couple , one of whom is temporarily in residential care, are still treated as a couple for benefit purposes; once the separation becomes permanent, they are treated as two separate individuals. A dependent child is any child under 16 (even if they have a child of their own) and any child aged 16-18 who is still at school, or who has left school recently. Young people aged 16 or 17 who have left school and are no longer regarded as dependants, may claim in their own right, but only if certain conditions are fulfilled.

To claim any means-tested benefit, a claimant must have less than the maximum amount of capital. For Income Support, Family Credit and Income-based Jobseekers Allowance, this is £8,000; for Housing Benefit, Council Tax Benefit, or Disability Working Allowance, it is £16,000. For Income Support, where someone is living permanently in residential care, the figure is £16,000.

The qualifying conditions for Income Support are quite complex, but it is basically payable to anyone who has left school and is at least 16 (18 in some cases), who is not working more than 16 hours a week and whose partner (if any) is not working more than 24 hours a week, and who is in a "prescribed category" of people. These are people who do not have to sign on for work as a condition of getting benefit, and include people over 60, those with childcare responsibilities, carers, and those who are sick or disabled. Income Support is then payable if the income of the claimant is less than his or her "applicable amount" as defined in regulations. This is the amount they are deemed to need to live on. So if someone is deemed to need £80 a week, and they only have £75, income support pays the balance of £5.

Income-based JSA is similar, but instead of the "prescribed category" the qualifying condition is that someone is required to be available for work as a condition of obtaining benefit; the two are mutually exclusive. The calculation of benefit is the same.

Family Credit is a benefit which provides a top-up to low wages. It is available only to families with at least one child, and the parent (if a single parent) or at least one of the parents, in the case of a couple, must work for an average of 16 hours or more per week. Family Credit is dealt with by the Family Credit Unit at Blackpool. Disability Working Allowance is a similar type of benefit; it tops up low wages for a person who is disabled and who is therefore working in a low-paid job.

Housing Benefit pays all or part of the rent of a person who lives in a rented home. (The only way in which a houseowner can get help with housing costs such as a mortgage is through income support.) For anyone on income support, or with an income below income support level, the whole of the rent is paid; with incomes above that level, benefit is withdrawn at a rate of 65% of the excess. The amount of rent paid is not always the actual amount handed over by the claimant; firstly this may include payments for items other than accommodation (fuel, services, meals etc.) which are "ineligible", and secondly the rent itself is subject to a process of checking its reasonableness and appropriateness for the claimant.

Finally among the means tested benefits, Council Tax Benefit pays up to 100% of actual council tax for a person on income support or other low income.

Other Benefits

This three-layered system of benefits (contributory, non-contributory and income-based) covers most of the benefits, but there are several others which stand outside this scheme. The first two to note are the two statutory benefits; Statutory Sick Pay and Statutory Maternity Pay. Statutory Sick Pay is payable to anyone employed under a contract of service, provided they are being paid enough to be liable for national insurance contributions (£62 a week in 1997/8). It is payable for up to 28 weeks, as long as the sickness (and the job) continue. It is a flat rate benefit, with no provision for dependants, and is a minimum amount; there is nothing to prevent the employer implementing a more generous scheme. Statutory Maternity Pay is also a statutory minimum; it is payable for 18 weeks to a married woman who was working for a single employer for a consecutive period of at least 26 weeks up to and including the fifteenth week before the child is due.

A disabled client should be asked where their disability originated. Someone whose disability or illness resulted either from military service or from an accident or a disease at work may be entitled either to a War Pension or to an Industrial Injuries Disablement Pension. As a general rule these benefits are more generous than the "civilian" scheme. They will be considered in more detail with other disablement benefits.

Finally, other sources of help in cash or kind include the Social Fund (discretionary grants and loans to people on income support, and mandatory grants for maternity expenses, funeral expenses and cold weather payments), health benefits such as free prescriptions, free dental treatment, and so on, and education benefits such as free school meals.

All benefits must generally be claimed by the person seeking them. There is normally a requirement to complete a claim form. Decisions on benefits are usually taken by an "adjudication officer", with a right of appeal to a tribunal (commonly this is a Social Security Appeal Tribunal, but there are other tribunals such as Disability Appeals Tribunals and Housing Benefit Review Boards) and with a further appeal, with leave and on a point of law only, to a Social Security Commissioner. Commissioners Decisions are published and bind both Adjudication Officers and Tribunals. The present system of adjudication is changing in the near future.

Many of these rules (including the changes to the adjudication procedures) will be examined in more detail in future issues. If you cannot wait, then several books may be recommended. The books published annually by the Child Poverty Action Group (0171 253 3406) are invaluable. There are three - the National Welfare Benefits Handbook, covering the income-based benefits; the Rights Guide to Non-Means Tested Benefits; and the Jobseekers Allowance Handbook. An alternative source of information (all in one volume) is Tolleys Social Security and State Benefits Handbook. There are a number of computer programmes on the market, but being a Luddite as far as computers are concerned, the writer believes that a basic knowledge of the system is necessary to make the most of them. Having said that, the Lisson Grove Benefits Program (contact Jon Blackwell, tel. 0171 262 2066) is one that many people have found very useful and user-friendly.

Alan Robinson, Legal and Welfare Rights Training, Orchard House, 11 Commonside, Crowle, DN17 4EX, Tel: 01724 7108189