IntoWork Glossary
Some of the words, phrases and terms used in the IntoWork Calculator are defined and explained below. Please check through this page if you are unsure about any terminology used in the Calculator.
Premiums
Some benefits, where how much you can get is based on your income (means-tested benefits) such as Income Support and Housing Benefit, include Premiums. Your benefit will be calculated on a ‘personal allowance' based on your age and whether or not you are in a couple, and ‘premiums'. The most common premium is the Disability premium which is included in the calculations for IS and HB if DWP (Jobcentre Plus) has decided that you are ‘incapable of work' for at least 364 days following a claim for Incapacity Benefit (whether or not IB is actually paid).
Incapacity Benefits
Incapacity Benefits (a grouping) include several benefits paid when DWP agree that you are ‘incapable of Work'. These include Incapacity Benefit, Severe Disablement Allowance (which is closed to new claims) and Income Support on grounds of disability. As from 27 October 2008, new claims will be for ‘Employment and Support Allowance'. Part of the change is that DWP will no longer state that you are ‘incapable of work' but instead agree that you have a ‘limited capability for work'. Incapacity Benefits are assessed independently of Disability Living Allowance, which is not administered by Jobcentre Plus, but by the Pension, Carers and Disability Service.
Employment and Support Allowance
Employment and Support Allowance applies only for new and repeat claims on or after 27 October 2008. Existing claimants will remain on Incapacity Benefit for the foreseeable future (although there is a planned conversion for all old cases by 2015). The qualifying conditions for Employment and Support Allowance will in the main be the same as for Incapacity Benefit. However, there will be an initial lower rate paid for the first 13 weeks, at the same rate as JSA. From week 14 people will have to take part in a work capability assessment, which will move them up to the middle rate. People who are severely disabled will be paid the higher rate from the 14th week.
Disability Living Allowance - Care
Disability Living Allowance care component is paid to people who need attention or supervision. There are three levels, paid for different levels of care need. The lowest level is for people who cannot prepare a cooked meal or who need attention from another person in relation to their bodily needs, for a significant proportion of the day but not all day. Middle level is for those who have either day-time or night-time attention or care needs, either in relation to bodily needs or to prevent substantial danger to yourself or others. The highest rate of care component is for those who need continuous care or are terminally ill.
Disability Living Allowance - Mobility
There are two rates for Disability Living Allowance Mobility Component. The lower rate may apply where you cannot walk outdoors without guidance or supervision from another person most of the time. This can include mental reasons for this disability. The higher rate is if you are unable or virtually unable to walk, and is if you have a physical cause of the disability only.
Council Tax bill
If you are living in independent housing (not a hostel) you will have a Council Tax Bill, sent once a year.
Gross
Gross in relation to earnings means before tax and National Insurance. If you have a pay slip, this should be on the pay slip. Often the employer will put on pay slips Gross Pay YTD (for the year to date - from April 6th) as well as the weekly or monthly gross pay.
Net
Net in relation to earnings means take-home pay after tax and National Insurance is taken off (and pension where paid through employer). This should be on the pay slip.
Occupational Pension
Occupational pension contributions should also be on the pay slip, where these are paid through the employer.
Last Financial Year
After the end of a financial year, (April 5th) an employer should give you a form P60 saying what your gross and net pay and pension contributions was for the year to April 5th. These can be entered straight onto Tax Credit forms.
Gross pension contributions for the last financial year
If you made contributions to a pension, either an employer pension scheme, or a private pension scheme, these will be taken off your income before tax credits are calculated. Therefore, if you have made such contributions, you need to enter them into the calculator (and have evidence to attach to your tax credit claim).
Gift aid payments for the last financial year
Gift aid is a scheme for giving money to charity with tax benefits. If you made such charity payments in the year to last April, you need to put them in the calculator.
Social security benefit income for the last financial year
Some benefits are taxable. If you have been receiving these, the Jobcentre should have sent you a P60 form giving your taxable benefit income for the last tax year. The main benefits counted are Contribution-related Jobseeker's Allowance (if you have enough National Insurance contributions, for the first six months), Carer's Allowance, and Incapacity Benefit other than at the short-term lower rate.
Working Tax Credit
Working Tax Credit can be claimed from the HM Revenue and Customs. It is a regular payment made if you are in work and have low income. Work is defined as 16 hours and over, but single people (without children to care for) who do not have a disability can only claim Working Tax Credit if you work 30 hours or more. WTC is paid ‘on account' on the basis of the last tax year and/or more up to date information on earnings you may have. It is recalculated at the end of the tax year on the basis of your P60 form. However, the first £25,000 of any increase in your income is disregarded from calculating overpayments. The second year's Working Tax Credit will be likely to be lower than the first year's because the first year's calculation is based on the year before you started work. Working Tax Credit payments must be declared for Housing Benefit as it is included as income in the Housing Benefit calculation.
Savings
Savings in excess of £6,000.00 will affect means tested benefits. This includes Income Support, Income Based JSA, Income Based Employment and Support Allowance and Housing Benefit and Council Tax Benefit. For every £250.00 savings over £6000.00, £1.00 will be deducted from a person's benefit. This is known as Tariff Income. This applies until savings reach £16,000.00. Savings in excess of £16,000.00 will completely remove any entitlement to means tested benefits. For people in receipt of contributory based benefits, this does not apply. For more information on the tariff income scale of reductions, see the DWP's guidance.