A Short Overview of the UK Benefits System

The UK benefits system is designed to provide survival income to people who are unemployed, either because they cannot find work or because they are unable to work. Unfortunately, given that no two individuals are the same, the system is necessarily complex. This short article will provide a starting point for people who need some pointers on where, how and what to claim. The question of when to claim is simple: immediately. The longer you wait, the more time you will have no income. Backdating of claims is possible, but doesn't happen often (except with very good reasons), so claim straight away.

The first thing to consider for a claim is eligibility. Any adult UK citizen can claim benefits, provided they are 'habitually resident' - that is, have lived in the UK for the last two years or are a citizen, have moved back to the UK and intend to stay. Some evidence of this may be required, depending on how recent the move was: such proof can include bank accounts, rent agreements and so on that show the individual's intention to remain. Non-UK citizens (EU, etc.) can also apply for benefits, but the decision is more complicated, especially for people coming from outside of Europe. The important thing is to provide as much evidence as possible of your past, present and future residence in the UK.

The next step is to decide which benefit(s) to claim. Recently, the government introduced ESA: the Employment and Support allowance. This effectively combines the old JobSeeker's Allowance (unemployment benefit) and Incapacity Benefit into one option for anyone who is looking for work, whether they are sick or not. It's a fairly major change in an attempt to simplify the system, but does not greatly affect the process of deciding what to claim. Alongside ESA, the Income Support benefit continues, for those on very low incomes or for people who are full-time carers, lone parents, pregnant or unwell.

Just one moment, though - ESA is for people who are sick, so what's that about? The thing with the benefit system is that some are mutually exclusive and some aren't. Income Support is often a way of 'topping up' another benefit, as it can be affected by 'premiums'. For example, if an individual has been sick for a long time, they receive a Disability Premium, which increases the amount of Income Support they could potentially receive. Assuming they are not getting enough money from their Incapacity Benefit (or the new version, ESA), they will receive a little extra cash to 'top up'. There are a lot of different premiums on Income Support so, as a general rule, if you are claiming ESA for any reason other than simply not being able to find work, claim Income Support as well. The worst that can happen is that they say 'no'.

To claim the basic benefits (ESA and Income Support), individuals call the government's central number and apply. It's a free number (0800 023 4888) and the service will call you back, even if you're on a mobile phone. They will either go through the whole claim with you over the phone or arrange a time to call you back to go through it. Free telephones are also provided for claims calls in every JobCentre Plus. Both benefits can also be claimed online. Any earnings (part-time work and so on) and large savings or capital will reduce how much you receive, though the upper limit before disqualification on savings is £16,000 at the moment, which is surprisingly high.

That's the basic benefits. However, there are also additional benefits of which fewer people are aware or which are not governed by the same department. Primary amongst these are Housing Benefit and Council Tax Benefit. Although when making a claim for one of the main benefits, you will be asked if you wish to claim these as well, the actual claims are not handled by the JobCentre: the local council deals with them. In some places (and this comes from personal experience), the council will not process your claim unless you contact them directly, even if you ask to be considered when you call for other benefits. Consequently, it is best to contact them on the same day as your benefit claim and ask for their forms.

In addition, yet another department of the government deals with Tax Credits. The name is misleading, as it suggests that they are rebates or something similar: in fact they are additional monetary aids for people who are working or have children. Child Tax Credits are available for parents; Working Tax Credits are available for people who are working more than sixteen hours per week (with a second banding at the thirty hours a week mark). They are designed to ensure that parents and workers receive the minimum earnings as defined by the government, even if (for example) they are poorly paid in their job. Tax Credits are dealt with by HM Revenue and Customs and unfortunately cannot be claimed online.

There is also a less-known benefit called DLA - the Disability Living Allowance. At present, the government is attempting to spread knowledge of this benefit, since it can be a huge help for people with long-term difficulties. The big advantage of DLA is that it is not only tax-free, but it can be paid regardless of your income situation. That is, you could be earning a million pounds a week and still qualify for it. At its heart, DLA is a test of whether a person is 'disabled' - that is, has more difficulty than a standard person in performing certain activities. This could be due to physical or mental problems. An assessment is made and, if appropriate, a weekly sum is paid to the individual on top of any other income or benefits. DLA can also be claimed online, at the same site as the basic benefits.

If you are on the flip-side of DLA as a carer for someone who is disabled, you may be able to receive Carer's Allowance. This is a small amount of money per week for people who spend 35 hours or more looking after someone. It also entitles the individual to a premium on their Income Support, so is not negligible by any means. It can be claimed online at a separate location to the basic benefits (another government department handles it).

Those, then, are the basics of the system. It is horribly complicated and impossible to explain all the ins and outs in a simple article, but there should be enough information here to help people get started and perhaps find some additional money where none was expected. The government's website has recently had a new Benefits Adviser implemented, which helps immensely in picking which benefits to claim. Bear in mind that all information was correct as of November 2008, but will eventually change!