Types of legacy benefits

Legacy benefits

Job Seekers Allowance (JSA)

There are two types of JSA, which is paid to those who are unemployed and actively seeking work; Contributory JSA and Income-based JSA. Claimants must prove they are seeking work and are required to ‘sign on’ at the Jobcentre Plus every fortnight.

Contributory JSA is for those with a sufficient National Insurance contribution record and is paid for up to six months. Income-based is for those who have not paid enough National Insurance contribution, were self-employed, or who have had their contribution-based JSA stopped.

It is possible to claim New Style Jobseeker’s Allowance with, or instead of, Universal Credit depending on a person’s National Insurance record. It is a contribution-based benefit for those who are unemployed or work less than 16 hours a week.

Employment and Support Allowance (ESA)

There are two types of ESA, which is paid to those unable to work for medical reasons; Contributory ESA and Income-related ESA.

Contributory based ESA is for those who have a sufficient National Insurance contribution. Although it is not means-tested, the amount can change depending on certain circumstances. Income related ESA is for those deemed to have insufficient resources to meet their needs. Income, savings and other assets are considered and their partner cannot be working for 24 hours or more each week.

In order to qualify for ESA, a person must undergo a Work Capability Assessment. If they are found to be ‘fit for work’, they may be required to attend work-focused interviews or undertake “work-related activity”.

It is possible to claim New Style ESA with, or instead of, Universal Credit, depending on a person’s National Insurance record. It is a fortnightly contributory benefit, for those who have a limited ability to work due to health reasons.

Housing benefit

Housing benefit is paid by the local authority and is for those renting their accommodation. This is different to the housing element of Universal Credit, which is paid directly to the claimant, who then must pay their landlord.

Those on income-related ESA are automatically eligible for housing benefit. Owners occupiers may be able to get support with paying their mortgage interest through Income Support, income-based JSA, income-related ESA or pension credit.

Housing benefit does not help with Council Tax, but those on a low income may be able to apply for a Council Tax reduction under a local scheme.

Tax credits

There are two types of tax credits; Child Tax Credit (CTC) and Working Tax Credit (WTC). CTC is payable to those with children, whether in or out of work. WTC is payable to those in low-paid work. It is possible to receive just one or both. Tax credits are claimed on a family basis, rather than on an individual basis. They are means-tested. 

Other benefits

Personal Independence Payment (PIP)

Personal Independence Payment is replacing Disability Living Allowance and can be paid alongside Universal Credit to help with some of the extra costs of having a long-term disability or ill-health. Claimants will need an assessment and will then be awarded an amount based on how their condition affects them.

There are two parts of PIP; the daily living component and the mobility component. It is possible to qualify for just one or both.

State Pension

Men born before 6 April 1951 and women born before 6 April 1953 can claim the basic State Pension (bSP). If born later they will need to claim the new State Pension instead.

To get the full bSP, a person needs a total of 30 qualifying years of National Insurance contributions. If they are not eligible for a basic State Pension or are not getting the full amount, they might qualify for a ‘top up’ of £80.45 per week through their spouse’s National Insurance contributions.

Payments are £134.25 per week. This increases every year by whichever is the highest of the following:

• Average percentage growth in wages in the UK

• The percentage growth in prices in the UK

• 2.5%

The Additional State Pension is an extra amount of money on top of a bSP and is partly earnings related. Those who are eligible will automatically receive it.

Men born on or after 6 April 1951 or women born on or after 6 April 1953 can claim the new State Pension (nSP). They need at least 10 qualifying years on their National Insurance record. The amount is £175.20 per week, but it can vary.

Pension Credit

Pension Credit is an income-related benefit made up of two parts: Guarantee Credit and Savings Credit. Guarantee Credit tops up a weekly income if it is below £173.75 (for single people) or £265.20 (for couples). Savings Credit is an extra payment for those aged 65 and over, who saved some money towards their retirement.