UK Benefit Guide
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Type: Contribution based
Taxable:
Short-term (lower) rate – No
Short-term (higher) and Long-term rates – Yes
Who is entitled ?
Incapacity Benefit is payable to people who are sick or disabled and have been incapable of work for four or more days in a row and who are not entitled to Statutory Sick Pay.
To get Incapacity Benefit a person must have paid enough National Insurance Contributions at the right rate and the right time.
How it works:
Incapacity Benefit is based on a person’s incapacity for:-
Work in their normal occupation for the first 28 weeks of incapacity (The own occupation test)
All work from the 29th week of incapacity (The Personal Capability Assessment)
A person is treated as having a normal occupation if they have worked for 16 hours or more a week, for more than 8 weeks out of the 21 weeks prior to the start of the claim.
A person will be subject to the Personal capability Assessment from the start of the claim if they had no regular occupation prior to this.
Existing Claims:
The Personal capabiltiy Assessment applies to previous Invalidity Benefit recipients with the following exceptions:
(1) people, aged 58 or over on 13 April 1995, who were continuously in receipt of benefit (ignoring breaks of 8 weeks or less) since 1 December 1993;
or
(2) people receiving the highest rate of Disability Living Allowance care component or are terminally ill;
or
(3) people suffering from one of a number of prescribed severe illnesses.
Medical evidence:
Medical certificates are only required to cover incapacity during the first 28 weeks of a claim or until the person has passed the Personal Capability Assessment – with the exception of (1) above medical evidence is required for the duration of the claim.
Effect on Income Support claims:
All claims to Income Support based on incapacity are subject to the medical test. With some exceptions the medical test will apply to Income Support recipients who were in receipt of benefit prior to the 13 April 1995.
Qualification for the Income Support Disability Premium will be 52 weeks with the following exceptions:
People receiving the premium through Severe Disablement Allowance;
People entitled to the premium on other grounds, E.g. Disability Living Allowance, Blind, Etc.
Over pension age cases:
Where a person reaches pension age after incapacity has commenced, Short Term Incapacity Benefit is payable for up to 52 weeks. They can choose to continue receiving short-term Incapacity Benefit or take their Retirement Pension.
Income Tax:
Clients benefit will not be subject to Income Tax if they were in receipt of Invalidity Benefit prior to 13 April 1995.
For all others tax will only be due if the person’s Incapacity Benefit and any other taxable income exceeds their tax allowance. Clients with other taxable income e.g. Occupational pension will receive gross Incapacity Benefit. Tax will be recovered by adjustment of the claimants tax code which is being applied to their other income.
Rates of Incapacity Benefit
Effective from April 2015
Personal benefit
Long-term Incapacity Benefit
£105.35
Incapacity Age Addition
The person may be entitled to an age addition if they are receiving long-term Incapacity Benefit and were under age 45 on the first day of incapacity for work. This includes days of Statutory Sick Pay.
Incapacity Age Addition is paid on one of two scales, depending on the people age on the first day of incapacity:
Rates of Incapacity Benefit Age Addition
£6.20 lower rate – if the client was aged between 35 and 44,
£11.15 higher rate – if the client was aged under 35
Rates of Dependency Increases (Adult)
For husband, wife or person looking after children with:-
£61.20 Long-term Incapacity Benefit
The increase for an adult dependant is only payable if:-
the dependant is over 60 years of age; or
there are dependant children and you / they have child benefit for them.
Dependency Increases (Child) See Note Below
For people in receipt of long-term Incapacity Benefit that previously had these additions included.
Rates of Dependency Increases (Child)
£8.00 for the first child
£13.95 for any subsequent child
Earnings may affect the extra benefit payable for the person’s husband, wife or person looking after children or any child additions. If the amount earned exceeds prescribed limits.
NOTE:
Child additions are no longer available for NEW CLAIMS Child Tax Credits should now be claimed for any dependent children. People already getting child additions are not affected.
New partner additions are no longer available after April 2010