It's not just the poor who can gain from the benefits system
Middle Britain misses out as £16bn goes unclaimed.
Sunday 07 February 2010
You don't have to be poor to qualify for benefits. Government tax credits and childcare vouchers are targeted at families in middle-class Britain, while money off council tax is available for pensioners and for those living on their own.
But it seems that many Britons are reluctant to claim what they are due – perhaps through lack of knowledge, fears of heavy-handed bureaucracy or of being stigmatised for taking a "handout". As a result, leading charities are urging the Government to take action and reduce the £16bn in means-tested benefits and tax credits that goes unclaimed every year.
Figures published last week by Citizens Advice highlight glaring examples of poor take-up of benefits. Low-paid workers without children, for example, are missing out on tax credits worth at least £38 per week. There are also up to half a million households failing to claim for housing benefit, worth an average £37.60 per week.
It's a similar picture with the take-up of council tax benefit and pension credit. As many as £3m households miss out on around £13 a week in council tax benefit, and up to 1.7 million pensioners are under-claiming an average £31 a week in pension credit. Overall, up to £5.4bn in benefits is going unclaimed by older people each year.
"The means-tested system is clearly failing to reach many of the people it is meant to help, including middle Britain," says Andrew Harrop, the head of policy at Age Concern and Help the Aged. "The Government needs to work at full speed towards a more effective, automatic system for paying benefits."
So what are the benefits that you could, and should, be claiming for?
The complex tax-credits system has suffered with overpayments and errors, but don't let this put you off as tax credits could be worth thousands of pounds a year to you and your family.
Working tax credit (WTC) and child tax credit (CTC) are means-tested, so the amount you get will depend on several factors including your overall income level, how many hours you work, how many children you have living with you and if you pay for childcare.
CTC is made up of two parts; the "family element", worth a maximum of £545 a year, and the "child element", worth up to £2,235 per child in the current tax year. Further payments are available to those with disabled children and children under the age of one.
Even households with an income of as much as £50,000 are eligible for the entire family element of CTC. However, if you earn more than £16,040 the child element will be reduced.
The basic element of WTC is worth up to £1,890 a year and the couples and lone parent element up to £1,860. Again, there are further payments available if you qualify for the disability element. And, if you are over 50 and returning to work after being on state benefits for at least six months, you may be able to claim for extra tax credits worth up to £1,935 per year if you're working 30 hours or more per week.
Pension credit is made up of two parts: The guarantees credit and the savings credit. The former is for the over-60s and guarantees to top up your income to at least £130 a week if you are single, or £198.45 a week for couples. From 6 April 2010, the pension-credit age will gradually rise in line with the increase in the state pension age for women from 60 to 65.
The savings credit rewards those over 65 who have saved towards their retirement with up to £20.40 a week for single people, and £27.03 a week for couples.
"While pensioners are feeling the impact of the recession on their pension pots more than ever, over one in four of them are failing to claim full pension credits. This resulted in as much as £2.4bn of pension credits being unclaimed last year," says Karen Barrett, the chief executive of Unbiased.co.uk.
Housing and Council Tax Benefit
If you are a low-earning tenant, you may be able to claim for help with your rent. If you rent a property or room from a private landlord, housing benefit is calculated according to the local housing allowance that applies to you. These rates are published at the end of each month and can be found on your council's website.
Council tax benefit is open to homeowners and tenants and eligibility for this and housing benefit is based on how much you and your partner earn, money from other benefits and occupational pensions, your savings and your circumstances. Typically, anyone with over £16,000 in savings, or living in the home of a close relative, as well as full-time students and asylum seekers, will not be eligible.
Importantly, child benefit is no longer counted as income when working out how much you can get. This may mean that you are now eligible for these benefits, so contact your council to check. Those entitled to income support, income-based jobseeker's allowance or the "guarantee credit" of pension credit could get a 100 per cent reduction on their bill.
Otherwise, you can have your council tax bill reduced by 25 per cent if you live on your own or if you share with other people but are the only person liable to pay council tax.
Jobseeker's Allowance and Income Support
If you are unemployed, are under the state pension age and registered as actively seeking employment you can claim for jobseeker's allowance (JSA), which is either contribution-based or income-based. The amount you receive will depend on your age and circumstances. For example, contribution-based JSA is worth up to £50.95 a week for 16- to 24-year-olds, and £64.30 a week for over-25s. The maximum weekly rates for income-based JSA is £100.95 for couples 18 and over and £64.30 for a lone parent aged 18 or over.
If you claim income-based JSA you are entitled to other benefits, including free dental treatment, prescriptions and sight tests, plus help with glasses or contact lenses costs. Apply through your local Jobcentre Plus.
If you are not looking for work because you are a lone parent, a carer, or suffering from an illness or disability, you may be entitled to income support instead. You will need to have savings of less than £16,000 and be out of work or working fewer than 16 hours a week.
Check if you are also entitled to free school meals, housing and council tax benefit and cold weather payment.
Childcare vouchers can be claimed by working parents in exchange for a reduction in their salary. Parents can sacrifice up to £55 a week and the vouchers are exempt from tax and national insurance contributions.
Both parents can use the vouchers, saving higher-rate tax payers as much as £1,195 a year. But the Prime Minister, Gordon Brown, has announced that top-rate taxpayers will have their benefits halved, so any new entrants to the scheme from 2011 will only get tax relief at the basic rate of 20 per cent.
However, some parents are unaware of the finer details of how childcare vouchers work. "Many parents simply don't realise they can be used for nannies and childminders and even music lessons if they are outside school hours," says Simon Moore, the head of Computershare Voucher Services, the childcare voucher provider.
Childcare vouchers are not for everyone, though. As with many other benefits, complications may arise if the vouchers affect your entitlement to other income-related or contributions-based benefits such as maternity pay and working tax credit. To make life easier, the Revenue and Customs website has a helpful calculator to determine whether you should claim or not.
Derek Pain: I'm cautious, but remain one of the few bulls in the market
Donald MacInnes: Who would want to be a Barbie girl in a non-Barbie world?
Mark Dampier: How to get an income now that savings are past the 'use by' date
Thousands of UK investors could lose out following collapse of Secured Energy Bonds
Bargain Hunter: Fly off for a winter break in France or Portugal for well under £100
- 1 Stephen Fry explains what he would say if he was 'confronted by God'
- 2 Venezuela Expo Tattoo 2015: Extreme body art from 'Vampire Woman' to 109mm earlobes
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Ball pool for adults opens in London
Stephen Fry explains what he would say if he was 'confronted by God'
9 reasons Greece's experiment with the radical left is doomed to failure
Have we reached 'peak food'? Shortages loom as global production rates slow
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
Hard line on immigration could cost Tories the election
iJobs Money & Business
£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...
£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
Day In a Page
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion