Some welfare payments and allowances are means tested. This guide explains the difference between a means-tested benefit and non-means tested benefits.
MEANS TEST DEFINITION: Means testing is a method of evaluating personal financial circumstances.
An official investigation determines eligibility of a person's rights to benefits and allowances.
In simple terms, having income and savings can affect welfare eligibility criteria. Quantities of capital can include investments and certain types of property.
It is important to understand that different means-testing rules apply to different claims.
The determining factor is often whether the claimant is over or under Pension Credit age. Because of that, future means tested benefits may not apply to all couples.
There may be issues where one partner is over Pension Credit age and the other is below it. It appears the roll out of Universal Credit will address this type of claim instead.
UK government estimate the amount people need to live on. A person's means will include income, savings and any other capital equity. The total amount of means must lower than the needs to qualify for financial support.
If not, benefits may get reduced or may not get paid at all. Thus, benefits entitlement varies from one individual to another.
Claimants need to show a 'means' of income and capital below a certain level to get means tested benefits 2021. A current list of means-tested benefits would include:
Note: As a rule, these benefits are available even if some National Insurance contributions are missing.
As a rule, the majority of capitals get taken into account for benefits means-testing. They will include:
Social security benefits means testing ignores some types of capital. In particular, it does not include the value of the property that you may own and live in. It also excludes lump sum payments you get after deferring the basic State Pension.
Most non-means tested benefits ignore income and savings compared to means-tested benefits. But, some non-means tested benefit rules apply for certain situations.
Most contributory benefits replace earnings. Examples include losing your job or being unable to work through illness or a disability.
Getting contributory benefits depend most on your (or your partner) NI contributions (or credits). But, they are not means tested. That said, some income earned through pension payments can affect the amount you get.
The majority of non-contributory benefits help with extra costs associated with a disability. They also apply for those who are caring for a disabled person.
There are no NI contributions conditions and no means testing take place. Meeting the eligibility criteria is enough to make a claim.
All statutory benefits replace regular earnings when you are taking time off work. As a rule, common reasons to claim statutory welfare would be for illness or maternity leave.
They are not means tested. But certain rules on earnings may apply to meet the qualification and they get paid by your employer.
Means Tested Benefits List vs. Non Means Tested Social Security Benefit