Incapacity Benefit

Who is it for?
People unable to work because of sickness. See also Statutory Sick Pay and Employment and Support Allowance.

Who pays it?
Job Centre Plus

Which leaflet? And how is it claimed?
No new claims can now be accepted (see ESA) unless claim can be ‘linked’ back to a previous claim.  Claimants still subject to Personal Capability Assessment conducted by DWP – appointed medical examiners (www.dwp.gov.uk).  Compulsory work-focussed interviews at Job Centre Plus.

What are the age limits?
Only up to pension age (60 women, 65 men). IBY is for people aged 16-19 (under 25 in some cases)

National Insurance based?
Normally yes and payable only if claimant has worked in one of last 3 complete tax years (with some concessions for carers). People disabled before age 20, and some aged 20-24, will get Incapacity Benefit without any NI test. This is known as IBY.

Means tested?
No. But claims that began after April 6th 2001 are reduced by 50p for every £1 that occupational or private pension exceeds £85 per week (with some exceptions e.g. people getting higher rate DLA Care)

How long does it last?
The short-term rate is for the first 28 weeks, the short-term higher rate from week 29 to week 52, and the long-term rate from week 52 onwards.

What is effect on other benefits?
Counted in full for all means tested benefits.

Is it taxable?
The short-term higher rate and the long-term rate are taxable.

Increases for dependants?
Yes, but only for an adult if there is a child, or adult is 60+ No additions paid for children – claim CTC instead.

Payable if in EU or other?
Yes, normally for up to 26 weeks of temporary absence. But long-term rate paid in EU or other reciprocal agreements countries.

Points to watch
Some claimants are exempt from ‘Personal Capability’  test eg severely mentally impaired people. Incapacity benefit no longer ‘downrated’  whilst in hospital. Young people transferred onto IBY from SDA may lose income support. People on occupational pensions often fail to claim the IB that is also due to them. Can be claimed by people in education.

Incapacity Benefit being reformed in October 2008 into an Employment and Support Allowance for new claimants. Existing claiimants will transfer from 2010/11. Pathway to Work scheme went nationwide from April 2008, which involves more strinigent testing of fitness for work and involvement of private and voluntary sector organisations in supporting people into work. 

People getting incapacity benefit can do part-time ‘permitted work’  but strict rules exist re earnings (£93.00 per week) and hours of work allowable (16 per week).  Even if claimant keeps pay below the earnings limit, pay of over £20 a week may affect any means-tested benefit also in payment, such as income support or housing benefit (although HB will have higher limit of £93 on earnings from April 2010).

You can view details of benefit amounts on the Community Care Inform website

The A-Z of Benefits 2009 was compiled by Gary Vaux and Community Care Inform