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Means-tested benefits are available to people who can demonstrate their income and capital are below an agreed level. Some benefits are means-tested which means one’s income level and capital affects their eligibility. But which benefits are means-tested?
Around seven and a half million households are missing out on £16 billion a year of means-tested benefits according to recent Government figures.
Jobs are being cut around the UK because of the impact of the coronavirus pandemic.
The unemployment rate surged to hit 2.7m between March and July according to official figures and many economists expect this trend to continue.
The UK is now in recession for the first time in 11 years, which means some people may continue to lose jobs, find it harder to get promotions or a pay rise.
The International Monetary Fund (IMF) predicts huge falls in GDP for 2020 as a whole.
In terms of this decrease, the IMF forecasts a fall of 8.0 percent for the US and 10.2 percent for the UK.
The organisation said the entire world will shrink by 4.9 percent this year, making it the worst recession since the Great Depression of the 1930s.
The Bank of England said the UK economic slump will likely be less severe than expected, but recovery will take much longer, predicting the economy to shrink 9.5 percent this year, compared to an earlier estimate of 14 percent.
Which benefits are means-tested?
The following benefits are means-tested:
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Income Support
- Pension Credit
- Tax Credits (Child Tax Credit and Working Tax Credit)
- Housing Benefit
- Council Tax Support
- Social Fund (Sure Start Maternity Grant, Funeral Payment, Cold Weather Payment)
- Universal Credit.
PIP is not means-tested based on income, but it is only available to those who meet certain criteria.
To be eligible, you must:
- Have had difficulties with daily living or getting around (or both) for 3 months
- Expect these difficulties to continue for at least 9 months.
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What is included in a means test?
Several income types are fully considered whether you are or are not eligible for means-tested benefits.
However, others such as the receipt of Attendance Allowance is entirely ignored.
Your partner’s income and capital may also be taken into account.
The following income types and capital are taken into account for means-tested benefits:
- Stocks and shares
- A share of any savings you own jointly with other people
- Property other than your main home
- Premium Bonds
- National Savings accounts and certificates (there are special rules for valuing these).
Any lump sum payment you received from deferring your State Pension is not included as capital.
What are the capital limits for means-tested benefits?
Each benefit has different rules and eligibility criteria in terms of income and capital to be able to claim it.
If your income or capital is greater than these levels you may not be able to claim.
For instance, with Housing Benefit and Council Tax Support, there is a lower capital limit of £10,000 and upper capital limit of £16,000.
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