A look at the main means tested benefits that can help with certain specific bills and costs such as rent, mortgage payments, council tax and health costs
Welcome to the third in a mini-series of blogs around means tested benefits and tax credits. While most - but by no means all - will eventually be replaced by a new Universal Credit, the benefits below are still with us for some time yet.
- In Part One – see below for a link - we looked at what means testing means , and why we have a mixture of means tested and non-means tested benefits in the system.
- In Part Two – see below for a link - I took you on a "Cooks Tour" of the main means tested benefits and tax credits that help top up a low income, highlighting their relevance to people affected by cancer and signposting to blogs where you can find out more.
This time I am focusing in on those that can help people receiving any of the benefits tax credits that we looked at last time with specific costs:
- those related to housing: rent, mortgage interest and council tax
- help with health costs
I will pick up the numbering from last time
6 Passported benefits
You can be "passported" to the benefits in this blog if you receive one of the benefits mentioned in the last one, although not all people receiving a tax credit will qualify – it will depend on income. . This saves you having to declare and evidence your financial situation all over again, given the means tests used are very similar.
This means for example that anyone receiving Income-related ESA, Income Support or Pension Credit is automatically passported over to full Housing Benefit or maximum help with health costs.
As well as being convenient, passporting can save the day :-). For example:
Gandalf and Galadriel eyes meet across a Kitchen table at the Lothlorien Centre and true love blossoms. Galadriel has a couple of centurie' worth of life savings that when coverted from the elvish amount to some £30,000. They applied to the Rivendell District Council for Housing Benefit and were turned down as being over the £16,000 savings limit for HB.
They are resigned to using their savings to pay the rent, when they chat to Aragorn the Advisor back at Maggie's. He spots that their income is a bit below Pension Credit levels which has no savings limit.
"Well every little helps says Gandalf. "Ah" says Aragorn "We don't want to give you that ... Getting Pension Credit will now passport you through the tests for Housing Benefit including their savings limit. You will now get full help with your rent"
"That's magic" says Gandalf
And similar stories happen in our Centres, when people may wander in on the off-chance that they might get some help with fares to hospital and rather than reach for the health costs forms, they find themselves with extra income and rent too :-)
Passporting is only one way though to access the benefits below. They are by no means the only one. It may be that your income is a little bit too high for any of the benefits in the last blog, but you might still get help with some - or even all of - your housing or health costs.
7. Help with housing costs
7.1 Housing Benefit (HB)
Housing Benefit (HB) is the most universal of all of the traditional benefits, as its doors are open to all who need help with the rising costs of rent, regardless of whether you are in work or not, over pension age or under, whatever your route to other benefits may be or even if you have none or have been sanctioned.
HB is claimed from your local council to help with the rent - whether you are in a council, housing association or private tenancy.
If you are on any of the means tested benefits in last week’s blog you will automatically pass the financial assessment for full Housing Benefit. If you are getting tax credits, it will depend on your combined earnings from work and tax credit
If your income is a too high for a means tested benefits, you can still apply for HB. Although HB uses similar sums to decide if you can get Full HB, those with higher incomes may still get Partial HB. The sums don’t just stop with no payment if your income exceeds your “appropriate amount” - ie. the level -for top up , as with other means tested benefit. Rather, your potential Housing Benefit starts to taper off at 65% of the amount by which your income is over that level.
Example: So if your income is say £100 over the level to receive full Housing Benefit, you can still receive some help – but reduced by £65 a week.
What is left to pay to you, depends on how much your rent is. But the real rise in rents since rent controls and subsidies for building social housing became unfashionable, means that rent levels are much higher than they once were. That means help from HB can go considerably higher up the income scale than you might think. Once upon a time, HB was mainly claimed by those on low “out of work” incomes, but now the majority of HB recipients are in paid work.
7.2 Restrictions on the help HB can offer
Using HB almost exclusively to help people "after the event" with their rent – along with market solutions not delivering the hoped for new housing – means that the costs of HB have been rising alarmingly.
The long term solution is perhaps rethink approaches to providing affordable housing, with measures to increase the supply of affordable housing, and there are indeed signs of the return of housing policy. In the short term, the quick “blame the victim” approach has been applied, to tackle the symptoms rather than the cause and try and keep a lid on the rising HB bill, by bearing down further and further on the maximum rents that HB will can cover:
- Local Housing Allowance: Initially that was keeping private tenants down to housing that was suitable to the size of the household and within the lowest 50% or rents in an area. That was squeezed down to the bottom third of the rental market and then just pegged to annual inflation ; in some higher rent areas, you are restricted to the bottom 10% of properties…
- The bedroom tax There was less need to control rents in the social sector as councils and housing associations are less high, while tenants are less free to in theory contract for the finest penthouse flats – allocation is controlled based on housing need. However there is a measure to reduce rent if you now have more bedrooms than you are deemed to need, through the controversial “bedroom tax”
- The benefits cap: Originally a measure to restrict the maximum benefits anyone could receive to less than the average wage, the savings were minimal as so few benefit claimants had such incomes – less than 1% and usually due to HB in high rent areas. It was more of a political move to foster indignation at the thought that people on benefits might be getting such incomes. Since then the cap has been significantly reduced so now affects up to 5% of tenants – again it is high rents and larger families – until the two child policy takes effect. The impact of the cap is to take money out of your HB until you are back below the cap levels, with no actual regard as to how you are meant to manage – a total break with the normal way of doing things
7.3 Top ups to HB from Discretionary Housing Payment (DHPs)
Many tenants receiving HB have to dig into other income to meet the shortfall between what HB will cover and their actual rent. The Government did recognise that its general rent restrictions were a blunt instrument and would crete some really hard cases, so did put a little of the savings back into the cash limited pot of discretionary top ups that can help meet the “shortfsll”. This is via a top up of your HB via a Discretionary Housing Payments (DHPs) also run by your local council.
These look at your disposable income and other circumstances. For many a DHP might only be for the short term, to give you a breathing space while you find somewhere cheaper to live. But for many people affected by cancer, councils will also consider the extra stresses of moving, your need to be near friends, families and hospital etc. As a result, many have been able to receive much longer term and renewable DHPs.
Devolved governments also have a say – so for example everyone facing a deduction for “bedroom tax” in Scotland will get a DHP – until such time as the Scottish Government have the powers to abolish it. This is achieved by topping up the DHP pot further.
8 Council Tax Support (CTS)
This replaced the former Council Tax Benefit (CTB) to give income related help with paying the council tax. It is available regardless of whether you rent or are an owner occupier (and whether or not you pay a mortgage) - a lot of owner occupiers don't realise that, so it is often not claimed - take up rates can be as low as 30% amongst older homeowners.
CTS is on top of other non-means tested discounts that may be available eg single status discount, where regardless of income if it’s just you in the property you get 25% off.
- For people over pension age across Great Britain, the old CTB rules (known as the default scheme) still apply.
- In Scotland and Wales the former rules apply to all, as the devolved Governments decided to top up the whole left in the previous cunning CTB budget.
- In England the help for those of "working age" will vary according to where you live, with each local council working out how to make good a 15% cut when CTB was localised in April 2013. Being on a means tested benefit still passports you through to the maximum help that is available in your area, but unlike CTB or the default schemes - that may still leave you having to pay up to 35% of the bill.
- Northern Ireland avoided both the excitements of the previous poll tax or the need for a compromise council tax, so is unaffected by these changes. The old rates system continues and alongside it the old rate rebate based on your income. See in the links below for more details
9 Help with mortgage interest
9.1 Check your mortgage protection insurance
If your prognosis is advanced and potentially life limiting, it may be that you might be covered by your general mortgage payments insurance for all future mortgage payments. And regardless of prognosis, you may be covered for a period because of earnings reducing because of sickness and possibly caring responsibilities.
That insurance based help has always been important because of a “waiting period” before any help from the benefits system kicked in. But is now considerably, more so, because since April 2018 that help has become markedly less generous
9.2 The old Support for Mortgage Interest scheme
Previously, you could get help with mortgage interest – known as “housing costs” - via an added amount within means tested benefits. This was based on a standard rate of interest – regardless of what interest you paid .
That amount was as much part of your “applicable amount” - your Income-related ESA or Income Support “level” as any other part of those sums, so sometimes it was only that help with mortgage interest that pushed people into entitlement at all.
There were restrictions on the mortgage level, on the kinds of other secured loans that you could also qualify and on taking on any loans while on benefit. And of course waiting periods, temporarily eased after the financial crash, but now usually back to 39 weeks
There was always a balance between homeowners – however financially desperate at the time, receiving something “extra” in being helped to hold on to a potentially appreciating asset and a pragmatic measure to reduce mortgage repossessions and homelessness.
9.3 the new loan scheme
Since April 2018, Support for Mortgage Interest within the main means tested benefits has been replaced by a separate loan scheme. The same restrictions apply as before, but now rather than a weekly payment, you will be offered a loan to cover your mortgage interest payments rather than a payment. That loan will also attract interest and be secured on your property. The old system ended and people were invited to take up the new loan offer and most have chosen not to do so.
As well as being perhaps less helpful in cash terms, it remains to be seen how lenders will react. In the past, they knew that interest was covered and so tended to be willing to allow arrears - in terms of actually paying off the capital sum – to accumulate. Whether they would be so so willing when the longer you receive help under the new scheme, the greater the charge being placed on your property remains to be seen.
Most people who were getting help under the old scheme chose not to take up the offer under the new scheme and have made their own arrangements with their lenders, but see the links for further details.
10 Help with health costs
The NHS is free for most treatment, but for many years there have been some additional costs and charges in place: dental and optical charges, prescription charges, NHS wigs and other items and fares to hospital (that can mount up if you travel to regional or specialist cancer centres) and parking charges.
10.1 Free prescription
All the devolved nations have moved over to free prescriptions for everybody. However, charges remain in place in England, but prescriptions remain free for children or pensioners.
However, all people of working age who have a cancer diagnosis regardless of savings and income are entitled to free prescriptions – whether these be related to cancer and its effects or not – for a five year period. To apply you complete a form FP92 and have it countersigned by your GP and send it off to receive an exemption certificate.
That still leaves potential prescription charges for others in the households – however they may get free prescriptions on grounds of low income:
- If your household receives one of the means tested benefits or maximum Child Tax Credits without earnings.
- If you are earning and claiming Working Tax Credit or Universal Credit it will depend on how much – see under proving your entitlement below.
- If you don’t receive any of these benefits then you may qualify under the NHS Low Income Scheme for this and other health costs.
Warning for those receiving Universal Credit: A problem has arisen from the lack of a tick box for Universal Credit on the back of e.g. prescription forms, where you tick to show why you are exempt from fees. Eventually all forms will have the necessary UC options, but in the meantime – acting on out of date advice – the NHS Business have been requiring people to tick the Income-based JSA box instead.
That may have been a fair alternative when UC was restricted to jobseeker claims only, but is totally inappropriate real, now that increasingly UC is open to new claims from all comers. Quite naturally people have been ticking the closes equivalent to their circumstances.
Unfortunately, the NHS business authority got into a “job’s worth, it’s not my problem, rules is rules” bureaucratic mode, just as they were embarking on a drive against fraud around the same time as UC was going “full service” .The fault lies entirely with the NHS Business Authority for not applying reason or understanding UC if they chose to continue to use out of date forms. But they insisted that only forms ticked Income-based JSA were valid for UC claimants and started handing out penalty notices and demands, just as people were struggling with UC’s early inadequate help for those waiting 5 or 6 weeks for their first payment. The advice then is:
- get advice before paying any such outrageous demand; and
- if you are on UC tick the Income-based JSA box - in the absence of a UC one -, however wrong that may feel or however much any of the other boxes feels much more appropriate to your situation . If you are earning on UC don’t forget to take along your last UC statement to show you are below the limits.
10.2 Other health costs
- - NHS wigs, fabric supports and mastectomy bras are free of charge in the devolved nations but subject to charge in England
- dental and optical charges apply outside of hospital in all four nations On income grounds you may get full vouchers for eye tests and lenses and basic frames or partial help . Any treatment at a hospital will be free of charge
- hospital parking charges apply in England only, as they have been abolished elsewhere. There may be discounts or schemes for frequent attenders and cancer patients at your local hospital, so do ask rather than assume you have to pay full whack each time.
- fares to hospital when you are the patient - and for a companion where necessary - are an issue in all four nations and all have similar Hospital Travel Schemes, with additional provision in Scotland and for the Isle of Wight for the additional cost of an overnight satay that distances may entail. These usually cover standard class rail, bus fares and money for fuel. Taxis can be used but need to be pre-approved beforehand. Ask at the clinic for where to go to collect refunds.
- fares to visit someone else in hospital used to be eligible for Community Care Grants from the old Social Fund. Check whether such help is still available from your national scheme in the devolved nations or from your Local Welfare Scheme in England if one is still running in your area.
10.3 Proving your entitlement to help with health costs
- a recent notification of entitlement letter will do if you ever need to prove you are getting a means tested benefit
- HMRC calculate tax credits annually and should provide a certificate if income is below £15,276
- Universal Credit should do the same as it will cover both situations. You are entitled if on UC with no earnings or with earnings under £435 a month as a general rule) or £935 a month (if you get a UC child or limited capability element) As with much else UC have not thought about it but if pressed will send a notification letter.
- an HC2 or HC3 certificate as a result of an application to the NHS Low Income Scheme
10.4 The NHS Low Income Scheme
The costs you may have to face may vary depending on where you live, but where there are costs to pay there is a common means tested system of help with those Health Costs.
So if you get any of the means tested benefits, maximum Child Tax Credit on its own or Working Tax Credit with an income of £15,276 a year or less, then you will be passported through to maximum help with health costs.
If you don’t happen to be on any of those benefits, but still have a low income you can apply separately on an HC1 form for an exemption certificate. If you do qualify you will get either an HC2 certificate giving you full exemption from all health costs or an HC3 giving you a partial exemption.
Do by all means pop into your nearest Maggie’ s Centre for a chat about help for these costs or for help with an HC1 form. But please don’t be surprises if we gently check other benefits entitlements. We might end up filling in an ESA or Income Support form instead.
For more details of the scheme and charges please see the Citizens Advice page here
11. Some more passporting both ways
There are other “passported" benefits that come from claiming those means tested benefits that top up your income: free school meals, local leisure schemes, access to disabled facilities grants, lower charges for social services care, energy grants and so on.
There is also a process the other way, where an award of a non-means tested “disability benefit” – i.e. Attendance Allowance, Disability Living Allowance or Personal Independence Payment are ignored as income. This means such awards are not counted as income to be taken away from means tested benefits, but they can also passport you to increases in your entitlement within the means tested benefits and tax credits.
This can also occur for carers, although this time the Carers Allowance does count as income, though potentially any reduction can be offset by some extra amounts in the means tested benefits.
To see how that works, we will have a gentle look at how the sums work especially as regards to some of those extra amounts for people who are unwell or who are carers.
And so...
Until then, I hope the thumbnail sketches of the means tested benefits and tax credits over Parts 2 and 3 of this series gives a sense of the range of means tested help that is available.
Some help by topping up your income:
- Income-related ESA may be most relevant to people with a cancer diagnosis and Income Support for carers, though new claims for both will soon be for UC.
- Or if over pension age, then Pension Credit may the one for both people with a cancer diagnosis and carers. and this will remain outside of UC
- If you are working through treatments, easing backing into work in recovery or taking a cut in earnings as a carer, then Working Tax Credit can help. Although do bear in mind that initially Income-related ESA can help with a return to work without the need for a new claim which may not be an option open to you
- And in all cases – in work or not, pension age or working age, unwell, caring or jobseeker - Child Tax Credit can offer extra amounts for any children or young people (still at school or college) that may be lying about the place.
- The benefits in this blog help with paying the rent (Housing Benefit) the council tax (council Tax Support ), a loan scheme for mortgage interest and health costs.
- Universal Credit will replace new claims for many – but by no means all – of the above for people of working age. Those on pension age can continue to claim Housing Benefit and tax credits.
But “passporting" may mean that you might as well - or really need to - claim one of the top up benefits to get at the help you might have initially been wondering about
And your Benefit Advisor’s eyes will always start glowing dangerously at the merest hint of a disability benefit, as these can be useful extra help regardless of your income and savings income. But they also can do some wonderful things to your means tested benefits too.
To see how that works - and also means tested benefits generally - it may help to do some simple and painless sums and see how it works with real live people and situations. So next time we will see how that works out in the case of Merlin, Morgan and other wizarding folk… I will focus on the "working age" sums, as you can already see how the magic roundabout of Pension Credit works in a separate blog
If you have any general queries, comments or experiences to share please post in the forums
If you would like to check out that you are not missing out on these - or any other benefit - in a private space, please contact the Benefits Advisor at your nearest Maggie’s Centre – which you can find here – or check out some other options in the links below.
Useful Links and further reading
External links:
- How to claim Housing Benefit - here
- Housing Costs and Universal Credit - here
- Support for Mortgage Interest - here
- How to claim Council Tax Support / Reduction - here
- Help with health costs: England - here / Scotland -here/ Wales - here / N. Ireland - here
Other parts in this series:
- Means tested Benefits (1): What are they and why means test? - here
- Means Tested Benefits (2) : Benefits to help top- up low income - here
- Means Tested Benefits (4) - How much might you get? How the Sums work- here
Other related blogs:
- Benefits in Pension Age (4): Extra help from disability benefits and Pension Credit - here
- Benefits in Pension Age (5): Pension Credit made real : simple sums and common examples - here
- Universal Credit - here
- Benefits and Cancer: an overview - starting here
Getting individual benefits advice and support near you
There may be a number of other places where you can get face to face advice, help with forms or challenging adverse decisions in your area. The local provision varies considerably but some good places to start looking include:
- visit your local Maggie's Centre and talk with one of our benefits advisors. Find your local centre here
- see if there is a Macmillan advice service nearer you - here
- find your local Citizens Advice office / bureau: in England & Wales - here. In Scotland -here
- Age UK - for older people - here