Who needs income protection?
Simply consider the following information:
Key Considerations
- Currently 90 families a day are having their homes repossessed.
The majority due to the financial problems associated with unemployment.
- One in three people aged between 25-34 have experienced unemployment
for a period in excess of one month.
- Almost one in five working age households (3.4 million) have
someone who is currently unemployed.
- Today in Britain there are nearl y 1,000,000 people who are
registered as unemployed.
- Every day 500 people in the UK become unemployed. 60% of unemployed
men and 45% of unemployed women will be out of work for six months
or more.
- Every adult in Britain is five times more likely to suffer a
serious disability than die before the age of 60.
- Today in Britain, 2,900 people will start claiming state disability
benefits.
- 1,800,000 people in Britain are already disabled and have been
unable to work for 12 months or more.
Will the state help?
You can no longer rely on the Government. State benefits for
a single person are currently under £60 per week. Could
you manage on that? The typical state benefit for two adults
with two children is £96 per week; the maximum is £134
per week. Could you support your family on this?
Since October 1995 new mortgage borrowers will receive no state
help for the first nine months of unemployment or disability. Existing
mortgage borrowers receive nothing for the first two months, only
50% for the next four months and then full benefit for mortgages
of up to £100,000 provided they qualify for Income Support.
The Government themselves estimate that 70% of mortgage borrowers
will not get Income Support due to savings, income, or a working
spouse or partner.
In 1998 alone, the introduction of a new incapacity criteria resulted
in 102,000 claimants being turned down for state benefit. An independent
doctor (not your own) will carry out your assessment and you must
be incapable of doing any work, not just your normal job, to qualify
for state benefit.
SOME OF THE MAJOR STATE BENEFITS
Non Means Tested Benefits Based On The National
Insurance (NI) Contributions
Statutory Sick Pay (taxable) - £63.25
a week paid by the employer from the forth day of absence until
week 28.
Lower Rate Short Term Incapacity Benefit (tax-free)
payable from week 1 to 28: £53.50 a week + £33.10 a
week for an adult dependant.
Higher Rate Short Term Incapacity Benefit (taxable)
payable from week 29 to 52:
£63.25 a week +
£33.10 a week increase for each adult dependant
£9.65 a week increase for first dependant child
£11.35 a week increase for each subsequent child
Long Term Incapacity Benefit (taxable) –
payable from week 53 onwards:
£70.95 a week +
£42.45 a week for each dependant adult
£9.65 a week increase for first child
£11.35 a week increase for each subsequent child
£14.90 a week age allowance if incapacity began under 35
£7.45 a week age allowance if incapacity began under age 35-44
Non Means Tested Benefits Not Based On NI Contributions
Disability Living Allowance (tax-free)
For people who need care to look after themselves.
a. Care component
Higher rate £56.25 a week
Middle rate £37.65 a week
Lower rate £14.90 a week
b. Mobility component
Higher rate £39.30 a week
Lower rate £14.90 a week
Attendance Allowance (tax-free)
Basically disability living allowance for over 65s without the mobility
component.
Higher rate £56.25 a week
Lower rate £37.65 a week
Industrial Disablement Benefit (tax-free)
Related to industrial injury and disease.
Amount based on extent of disability, can vary from £22.96
a week for the 20% disabled to £114.80 a week for 100% disabled.
Means Tested Benefits Not Based On NI Contributions
Income Support (tax-free)
Capital (or any belonging to a partner) must be under £8,000
to qualify – of under £12,000 if over 60.
Is supposed to ensure income doesn’t fall below a minimum level
and payments relate to factors such as age, mortgage interest, number
of family members and whether these are disabled or carers.
Can be paid on its own or in addition to other benefits or earnings.
Some families can receive over £200 a week.
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