How the Social Fund Can Help You through the Cold Weather

The Social Fund UK

The Social fund can help those on a low income with certain expenses. During the winter months, it is no secret that heating in the British home is somewhat of a necessity, but that doesn’t stop it from costing an arm and a leg to fund. This is where the Social Fund helps. If you are entitled, funding will be provided for your heating that does not require repayment and will be paid into the same account that receives your benefit payments. The scheme was put in place on the 1st November 2015 and continued until the 31st March, where people were given £25 per week to help with their heating bills. The scheme is due to start again on the 1 November 2016, and plans to run for the same period of time.

How does it work?

It’s all very technical, but in a nutshell, it has to be cold, hence The Cold Weather Payment. Those that are entitled will have their postcode area linked to a weather station and payments are then made when there is going to be periods of cold weather. The requirements for the payment are when the weather station forecasts seven consecutive days with an average daily temp of 0 degrees Celsius (or less). This more than likely means that during the winter months, there are certainly people that will be entitled to the payment. There has, however, been some criticism of the scheme, because some areas of Britain may be cold enough to receive a payment that week, while others may not. For example, in some areas of Kent, it may be at or below zero for seven days, requiring payment, where in close by Sussex, there might be a day during the week that takes the average temperature to above zero, meaning that it is ‘too warm’ to require a payment. Just the luck of the draw.

Who is entitled?

If you currently claim income, universal credit or income based Jobseeker’s Allowance then it is likely that you will be entitled to the Cold Weather Payment, in the next winter. Before we go any further, it is worth noting that the payments are not to be confused with Winter Fuel Payments. These are also a type of funding but are made to people above state pension age – whatever the weather. Another thing worth noting is that the Cold Weather Payment is based purely on income, and not savings, and you don’t need to go through the hassle of putting in a claim.

Other weather based entitlements

It doesn’t just stop at funds for heating, and there are other schemes available to keep your house cosy. Financial assistance is also provided through something called the Warm Front Scheme. With this, the government have aimed to tackle fuel poverty by providing grants for loft insulation, draught-proofing, wall insulation, gas heaters, central heating and hot water tanks. This might be offered to those living in poorly insulated properties, with no central heating system.

If your energy bills are becoming unmanageable, or have left you struggling after the cold winter, there is also another aptly named programme in place; the Warm home Discount. This is where rebates are provided on already paid energy bills. 2014-15 saw homes that qualified receive a bill rebate of £140. Instead of just receiving this in cash, the rebate comes in the form of a discount and should contribute towards settling any existing bills.

Female Victims Of Pension Reform Could Turn To JSA

Women who are expected to lose out on thousands of pounds as a result of the Government’s changes to the pension age are being told to think about claiming Jobseeker’s Allowance instead, by a Conservative minister.

Shailesh Vara is a work and pensions minister. He suggested unemployment benefits as a possible source of income for the millions of women who will have to wait 18 months longer to receive pension entitlements, because the state pension age is increasing from 60 to 65 by 2018. The comments came shortly before a debate took place in Westminster, influenced by a petition of over 140,000. The Government made the pension reforms in 2011 and campaigners are saying that they are too rushed, failing to give working women enough time to plan for their retirement.

Research conducted on behalf of the Labour party found that over 2.5 million women who were born during the 1950’s will be affected by the reform. However, any form of compensation for these women has been ruled out. Mr Vara said the reform needs to be viewed ‘in a broader context’. He said to MPs that there were ‘a whole lot’ of other benefits available to women who are affected, such as Jobseeker’s Allowance, Employment and Support Allowance, Carer’s Allowance and Personal Independence Payments. He said that we should not forget that pensions will be uprated and that the new simplified State Pension starts from April. He also cited an increase in cold weather payments and protected winter fuel payments as a good thing for pensioners. All of these options contributed to the ‘broader context’ that Mr. Vara spoke of. shutterstock_326906771

The former work and pensions secretary said that Mr. Vara’s comments were ‘outrageous’, adding that women do not want unemployment benefits, they want the pension that they are entitled to. The shadow work and pensions minister Angela Rayner said that it was ‘shocking’ to suggest Job Seeker’s Allowance as an alternative. She added that by accelerating the rise in the female state pension age and not communicating the changes effectively, ‘millions of families’ feel as if their plans for their later life have been ‘ruined’. She said that the petition was a ‘testament of strength’ to the campaign.

The debate in Westminster Hall was led by the Labour MP Helen Jones who said that she was also of an age which would be affected by the pension reforms. However, a number of Conservative MPs also voiced their concerns and called for transitional relief for the women who were going to be affected.

 

Calls For State Pension Age Rise To Be Slowed Down

MP’s have put inequality between men and women at the centre of their debate as they call for the planned rises to increase the State Pension Age for women to be slowed down or readdressed in order to give women who don’t have much time before they retire to adjust to the anticipated changes.

The debate took place in the House of Commons and was led by the Scottish National Party MP Mhairi Black. The debate has led to more calls for the Government to review the current policy around State Pension Age rises.

Since 2010, the age for women’s State Pension has risen from 60 to 65 to become equal with men, with plans for it to increase to 66 by 2020. The plans to equalise the state pension age have been in place since 1995 but were pushed into motion in 2010. However, some women have said that they weren’t informed of the planned changes in 1995. In particular, a group of women who were born in the 1950’s will face a dramatic difference in their planned age to retire.

MP Black said women had already faced a ‘lifetime’ of gender inequality in times of lower pay, as well as giving up work to look after children. She added that they were now facing ‘harsh’ rises in the State Pension Age.

She said women are getting ‘short changed’ just because they are female, adding that she did not believe the Government had to set out to purposely cause problems for pensioners. MP Black said the Government should now review its pensions policy or be condemned for it’s ‘vindictive’ actions towards those due to retire.

She found support from Conservative MP Tim Loughton who said that gender inequality most affected women in their 60s. He said that means-testing should be reintroduced to the state pension in order to help the pensioners who are struggling financially.

From April 2016, a new ‘flat rate’ pension scheme will be brought in. It will get rid of the savings element of the pension credit, which is used as a top up for the state pension claimants. shutterstock_326906771

In order to purchase an annuity of £6,000 per year you would need to have £100,000. Mr. Loughton said that for people with lower wages, the National Insurance contributions is the only form of pension they can afford. 10 years is not enough time to begin saving into a private pension to add to the state pension. Reintroducing state pensions for those over aged 60 which is means tested would help those who are hit hardest by the increase of state pension ages.

Pension Credit is a benefit which relates to income. It’s made up of two elements- the guaranteed element and the savings element. The savings element is an extra benefit for people who have saved some money towards their retirement, for example paying into a pension fund. Savings credit can pay £14.82 a week for single people or £17.43 for couples, on top of their existing pension.

To find out more about pension credit, call the pension credit contact number.

Britons Invited To Top Up State Pension

More than seven million British people are being offered the opportunity to top up their state pensions. Men who are over the age of 65 and women over the age of 63 can get around £25 a week extra on their state pension, in return for a one off payment.

The exact amount they will have to pay depends on factors such as their age- the older they get, the lower the cost. The offer is currently open to existing pensioners and those who will reach the state pension age by April 2016. After that date, a single tier pension will begin.

Currently, basic state pension is worth up to £115.95. The new flat rate pension will be worth up to £155 a week for people that qualify. The top up scheme will be known as Class 3A contributions and will provide pensioners with an income that will rise with inflation. Any spouses or civil partners will be able to inherit at least half of the income once their partner dies.  shutterstock_326906771

Currently, around seven million people are of pensionable age and are therefore eligible to take part. However, the DWP has said that the scheme won’t be suitable for everyone and expects around 265,000 people to take up the offer. A spokesperson said:

“It won’t be right for everybody and it’s important to seek guidance or advice to check if it’s the right option for you. But it could be particularly attractive for those who haven’t had the chance to build significant amounts of state pension, particularly many women and people who have been self-employed.”

The maximum amount of extra income possible will be £1,300 a year or £25 a week. Those wishing to apply have 18 months to do so.

 

A New Tax Year: Are You Prepared?

A new tax year commenced on the 6th April and a whole new set of reforms came with it. They can often be rather difficult to understand, particularly if you are one of the lucky few who have to complete a self assessment. The changes range from income tax right through to pensions, so let’s take a brief look at them and how they may affect you:

Income Tax

Tax free personal allowance will increase this year from £10,000 to £10,600. It will also be the first year people born between the 6th April 1938 and 5th April 1948 will have the same allowance as working age people, as their allowance has only increased by £100. The higher rate tax threshold is rising to £42,385 and the starting rate of income tax on savings will be cut from 10% to 0% on savings up to £5,000. Couples allowance means that people who are married or in a civil partnership are able to transfer up to £1,060 of their tax free allowance to their partner but only if neither of them pay more than the basic rate of income tax. Lastly, married couple’s allowance, which is only available if one partner was born before the 6th April 1935 has been increased to a maximum of £8,355 and a minimum of £3,220.

If you have overpaid tax, you will be able to choose between a refund or saving it for future tax bills.

National Insurance

National Insurance has one change this tax year. The Class 2 rate of contributions is increasing from £2.75 to £2.80. Class 3 contributions are increasing from £13.90 to £14.10.

State Pension

The basic state pension is increasing by 2.5 per cent or to £2.85 per week to a maximum of £115.95 per week. The maximum amount that pensioners who are on low incomes can receive with the addition of pension credit is £151.20 for a single person or £230.85 for a couple.

Pension Lump Sums

Under new rules, you can now withdraw your pension in one lump sum, however it will be subject to be taxed at your marginal rate of income tax (e.g. 20%, 40%) rather than 55% as was previously claimed.

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Inherited Pensions

Tax on inherited pensions is scrapped if the pension holder dies before they reach age 75.

Isa Allowances

The tax free annual Isa allowance will increase from £15,000 to £15,240. The junior Isa annual allowance will increase from £4000 to £4,080. The child trust fund allowance will also increase to the same amount.

Tax Credits and Child Benefit

Working Tax Credits are increasing by small amounts.

Basic element: £1,960.

Couple and lone parent element: £2,010.

30 hour element: £810.

Disabled worker element: £2,970.

Severe disability element: £1,275.

The Childcare element will be frozen at £175 for one child/ £300 per week for two or more children. For Child Tax Credits, the family element is frozen at £545 a year, but there are small changes to other elements.

If you have a high income and you claim Child Benefit, you may need to complete a self assessment.

Child element: £2,780.

Disabled child element: £3,140.

Severely disabled child element: £1,275.

Child Benefit is increasing by 20p a week to £20.70 for the first child and to £13.70 for the second and subsequent children. Guardian’s allowance is increasing by 20p a week to £16.55.

Maternity and Paternity Pay

The statutory rate of maternity and paternity pay is increasing from £138.18 to £139.58 per week.

Air Passenger Duty

Children who are under the age of 12 won’t have to pay Air Passenger Duty on economy class tickets from 1st May.

 

 

This is only a basic guide to the changes. If you are unsure of anything, make sure to dial the HMRC Helpline who will be able to assist you further.