Ward off poverty

Going into hospital for any length of time used to cause havoc
with a person’s benefits. Different benefits stopped at different
times and some people were left in hardship because the hospital
rate of benefit was inadequate.

The hospital down-rating system, as it is called, was simplified in
2003. More changes will come into force in April 2006. These will
mean most benefits will be kept at the full rate with no time
limits and people who have had benefits reduced will have them
reinstated.

But in the meantime, some people in hospital will still find their
money going down or stopping until the new rules kick-in. If anyone
goes in to hospital, it is important to advise the benefits office
that is paying them. It’s best to do this in writing.

Before April 2005
For a claimant aged 16 or over, disability living
allowance (DLA) and attendance allowance (AA) stop after four weeks
in hospital. The stopping of AA and DLA can mean that any income
support, pension credit or housing and council tax benefit that is
paid may also be reduced, because the claimant might lose the extra
“premiums” they received for being awarded DLA or AA. Anyone
claiming carer’s allowance for the disabled person over 16 would
have lost their right to that benefit too when AA or DLA stopped.
Any extra income support or pension credit a claimant receives for
being a carer of someone over 16 carries on for another eight weeks
after the AA or DLA stops.

Because DLA and AA claims are only suspended when a person is in
hospital, they can be paid again when they go home. They are also
payable for short periods out of hospital, even a day.

For a child under 16 in hospital disability living allowance is
suspended after 12 weeks. Carers allowance will stop when the
AA/DLA stops. Any extra income support or pension credit a claimant
receives for being a carer of someone under 16 carries on for
another eight weeks after the AA or DLA stops. If the carer is the
person in hospital, they will lose carers’ allowance after 12
weeks.

If the claimant is in hospital for more than 52 weeks, income
support and pension credit are reduced substantially. Housing and
council tax benefits normally stop completely. Incapacity benefit,
bereavement benefits and retirement pension are reduced to a very
low figure too.

After April 2005
The new rules mean a person keeps most of their benefits
at their full rate even after 52 weeks. This means that benefits
like retirement pension and incapacity benefit won’t be reduced to
the “hospital rate”.

But watch out for these exceptions:

• DLA and AA will still stop after four weeks (12 weeks for
  disabled children).
• Loss of DLA and AA will still affect other benefits as
  described above.
• Housing benefit will still be lost after 52 weeks, as it is
  assumed that the person is no longer liable for rent.

There are also rules for children’s benefits, lone parents and
couples that ensure money for children is paid. Some benefits, such
as tax credits, are not affected at all.

Gary Vaux is head of money advice, Hertfordshire Council.
He is unable to answer queries by post or telephone. If you have a
question to be answered please write to him c/o Community
Care