A guide to benefits; please read before posting.

dmg24

Incapacity Benefit

Incapacity Benefit (IB) is no longer available to new claimants. New claimants should apply for ESA, however if you have claimed IB in the past 104 weeks and ended your claim in order to return to work, you may reclaim IB if you become unfit for work again.

All IB claims must be renewed at a period determined by the DWP. In order to renew an IB claim, you will need to pass the Personal Capability Assessment (PCA). The PCA involves completing a form (IB50) about your condition, after which you may be called for a medical assessment. Certain groups are exempt from the PCA process, more information is available on exemptions here.

It is possible to do some work whilst claiming IB, known as Permitted Work.

IB Rates

Long Term Rate £91.40
Age Addition (Higher) £18.65
Age Addition (Lower) £9.35

The lower rate Age Addition is paid to those who first became unfit for work between the ages of 35 and 44 inclusive, and the higher rate under 35.

IB Links

Direct
Decision Makers Guide

dmg24

Help with Mortgage Interest (SMI)

If you are on a means test benefit, or have an underlying entitlement to one, you may qualify for help with the interest payments on your mortgage.

Mortgage interest help is available after a thirteen week period, and is currently set at 6.04%. This is due to fall to a rate of approximately 4% in October 2010. If the applicable rate is higher than your own rate, the lender should apply this to the capital element of your mortgage. It is not possible to withdraw this amount from your mortgage account.

With the above exception, help is not available to cover the repayment element of mortgage payments. If you are not able to cover this part of the payment, your lender may agree to allow you to change to an interest only product.

Links

Help with Mortgage Interest
Help with Mortgage Payment Difficulties

Murgatroyd21

Many people get worried when they hear they may be overpaid, but there are some things you can do to help avoid an overpayment happening, or at least minimise the impact.

Tax credit awards are based on the lower of either the previous year or current year income. People get confused because the claim form currently only allows inclusion of the previous year details, and people then have to provide current year details separately. How you do this and the details you give can cause a problem.

If your income for the previous year is less than the income for the current year, the previous year income will be used to calculate the award. If you advised the current year is likely to be less than the previous year, and provide a figure, the current year figure will be used.

Overpayments caused by wrong income is quite often because people don't realise the effect of changing (or not, as the case may be) income details during a year.

Example of a typical scenario -

You had a previous year income of £20,000 and the current award is initially based on that. Your circumstances change, i.e. lose your job, so you tell the new circumstances and provide a current year estimate, £6000, because this is what you have earned to date, shown on a P45 for example, and you can't say if you will be back in work in the current year, and don't provide any potential income for that year.

Your award is then re-calculated using the £6000 figure and payments for tax credits are increased.

2 months later you start a job and call tax credits to update your employment details.

At the end of the tax year your P60 shows a total income of £14000. This is more than the estimate you provided earlier, which your claim was re-calculated on. While it is still less than the previous year, because you reduced your income already and had a new calculation based on that amount, you are now overpaid because your actual income was more than the estimate you provided.

Too, the income disregard doesn't apply because you reduced the current year estimate below the previous year figure. If you had either left the income to be based on the previous year figure, or provided a higher amount than you actually earned, say £15000 in this scenario, you would be owed money at the end of the year.

You could also minimise the amount of the overpayment by increasing the current year estimate at the same time you updated your new job details.

When giving a current year income, you should remember it is an annual award and needs an annual figure as close to what you will get to avoid under or overpayments. Obviously depending on your circumstances, it is usually better to over rather than under estimate if you want to avoid an overpayment, and remember to take in to account all sources of taxable income, including taxable benefits.

Some people may deliberately use an underestimated amount as they need the additional tax credits now, but you will normally have to repay any overpayment either by reductions to future entitlement or directly if you no longer have an award in payment.

One last point, updating when a change happens can help avoid under or overpayments. Presently, with some exceptions, a change can be backdated for 3 months, but new rules coming in mean you have to tell within 1 month of a change happening, so tell as soon as you can either by telephone or in writing (recorded delivery is recommended).

Former_MSE_Wendy

What a wonderful thread. Thanks to everyone who's contributed