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Autumn statement: Employing PAs concession

03 December 2014

A small victory for those employing personal assistants

The Chancellor, George Osborne, has announced in his Autumn Budget Statement today that From April 2015, the government will also extend the £2,000 annual National Insurance contributions Employment Allowance to those households that employ care and support workers.

This means that a family will be able to employ a care worker on a salary of up to £22,500 and pay no employer National Insurance Contributions. In addition, care workers will be exempted from the impacts of removing the £8,500 threshold below which employees do not pay Income Tax on benefits in kind.

Sue Bott, Director of Policy and Development at Disability Rights UK said

“I am delighted with this move.  It stuck us as very unfair when last April the Government introduced the £2,000 annual national insurance contribution employment allowance to small employers and specifically excluded disabled people employing personal assistants.  Disability Rights UK and the Low Income Tax Reform Group have been lobbying to right this unfairness.  I’m glad we have been listened to.”

You can download the full Autumn Budget statement at https://www.gov.uk/government/publications/autumn-statement-documents

Here are some of the key changes. We will expand on many of these in fuller detail via the website and our updater service as we get more information.

Education and skills

2.224 Postgraduate funding reform – The government will introduce income-contingent loans of up to £10,000, planned to be available from 2016-17, for under-30s to undertake a postgraduate taught masters course. These loans will be structured so that, on average, graduates repay them fully, but they will beat commercial rates. One way of doing this is to charge an interest rate of RPI+3%, with repayments of 9% of income above a threshold of £21,000, frozen for 5 years, repaid concurrently with undergraduate loans. The government will consult on the detail and will then confirm the delivery plan.

2.225 Adult community learning and mental health – The government will commit £20 million in 2015-16 and 2016-17 to fund courses to help adults experiencing mild to moderate depression, anxiety and sleep disorders in England.

2.226 Expansion of effective academy chains – The government will provide £10 million to drive up educational standards in areas of the north with the weakest provision by helping outstanding local academies sponsor local schools and supporting the expansion of the very best academy chains. (26)

2.228 Early intervention pilot for 0 to 2 year-olds – The government will pilot a new approach to ensure that the most effective early intervention actions are taken during a child’s very earliest years, to prevent avoidable problems later.

2.230 Skills and employment services for parents – The government will provide £5 million to the Behavioural Research Centre for Adult Skills and Knowledge (ASK) to conduct pilots using Children’s Centres to provide employment support and access to basic skills training.

2.232 Mental health and employment – The government remains committed to improving outcomes for people with mental health conditions. This Autumn Statement announces that, starting in 2015-16, the government will invest a further £3 million to expand existing psychological work and wellbeing pilots. (59)

Energy and the environment

2.208 Household energy efficiency – As announced on 7 October 2014, the government will increase funding by £100 million over 2014-15 and 2015-16 to support households installing energy efficiency improvements.

Fraud, error and debt

2.163 Department for Work and Pensions fraud and error additional operational capacity – DWP will increase capacity within its fraud and error operations. Claims identified as carrying a risk of fraud, claimant error or official error will be targeted to ensure that claimants are not being paid more than they are entitled to.

2.164 Housing Benefit fraud and error local authority incentive scheme – New financial rewards will be paid to local authorities that reduce the amount of money lost through fraud and error in Housing Benefit.

2.165 Direct Recovery of Debts (DRD) – As announced at Budget 2014, the government will be able to recover tax and tax credit debts from the bank and building society accounts (and ISAs) of debtors. Following consultation, the government has further strengthened the safeguards which will apply to DRD.

Social care

2.17 NHS Funding – The government will spend an extra £2 billion on frontline NHS services in 2015-16. This is part of a multi-year £3.1 billion UK-wide investment in the future of the NHS. £1.5 billion will be used to help the NHS meet increased demand and deliver the best patient care in 2015-16, and £200 million will be invested in a transformation fund to help deliver the first year of the NHS’s ‘Five Year Forward View’. On top of this, the government will use the £1 billion of fines collected from banks that broke the foreign exchange rules to create a fund for advanced care in GP practices and community healthcare facilities. From 2015-16, £250 million per year will be invested in modern premises and technology to bring GPs, nurses and specialists together so that patients can get the best care close to home. These new primary care facilities will also be encouraged to join up closely with local job centres, social services and other community services.

2.15 To embed joint planning in health and social care further, and to build on the Better Care Fund, the government commits to giving local authorities and clinical commissioning groups (in collaboration with NHS England) indicative multi-year budgets as soon as possible after the next Spending Review. The government will also work towards enabling greater multi-year certainty in funding for schools and certainty for adult education providers where appropriate, in the context of area based strategies.

2.54 Extending the employer National Insurance contributions Employment Allowance to care and support workers – The government will extend the annual £2,000 Employment Allowance for employer NICs to care and support workers. This will come into effect from April 2015.

Transport

2.201 Access for All – The government will increase the funding for the Access for All scheme by £60 million between 2015-16 and 2018-19, improving platform access at approximately 20 stations.

Welfare benefits

2.6 Autumn Statement 2014 sets the level of the welfare cap in 2019-20 at £129.8 billion, the level of the OBR’s forecast for welfare spending in that year. The cap is adjusted in every year to reflect a neutral classification change in the OBR forecast. The forecast margin will be 2% of the cap in each year that the cap applies.

2.52 Blind person’s allowance, married couple’s allowance and income limit for 2015-16 – As announced at Budget 2011, the government will increase the blind person’s allowance, married couple’s allowance and the income limit by amounts equivalent to the Retail Prices Index (RPI) in 2015-16. (Finance Bill 2015)

2.83 Universal Credit: childcare package – From April 2016, the government will increase childcare support within Universal Credit to 85% of eligible costs for all families. In addition, if a claimant leaves Universal Credit and returns within a 6-month period, they will be able to keep their existing assessment period. To offset the cost of these policies, the Universal Credit work allowances will be maintained at their current level for a period of 1 year from April 2017. Surplus earnings that are in excess of £100 above a household’s Universal Credit award threshold will be accounted for in award calculations over a 6-month period.

2.84 Universal Credit delivery schedule – Universal Credit will be implemented in line with plans set out by the Secretary of State for Work and Pensions on 13 October 2014.

2.85 Carer’s Allowance: higher earnings limit – The government will increase the earnings limit in Carer’s Allowance from £102 to £110 per week from April 2015.

2.86 Personal Independence Payment (PIP) delivery schedule – The government will continue to roll out PIP natural reassessments (the migration of Disability Living Allowance claimants due for reassessment) in a controlled and gradual manner.

2.87 Employment and Support Allowance (ESA) – As announced by the Department for Work and Pensions (DWP) on 27 November 2014, the government will prevent claimants who have been found fit for work at a Work Capability Assessment from being paid the ESA assessment rate unless their condition has changed or a new condition has developed. The government will also extend the period of time that claimants may remain on Jobseeker’s Allowance (JSA) while sick without having to move to ESA, and pilot new approaches to supporting ESA claimants during the assessment phase and on return from the Work Programme.

2.88 Employment and Support Allowance: procuring additional healthcare professionals – The government is procuring additional healthcare professionals to reduce waiting times for Work Capability Assessments, reducing costs by over £200 million across the forecast period.

2.90 European Economic Area (EEA) migrant access to Jobseeker’s Allowance – Budget 2014 announced a limit of 6 months on EEA migrants’ access to JSA, unless they passed a Genuine Prospect of Work assessment. Autumn Statement confirms that the government will now limit EEA migrants’ access to JSA to 3 months, subject to the same assessment.

2.91 Genuine Prospect of Work assessment for migrants’ pre-existing Jobseeker’s Allowance claims – The government will apply a Genuine Prospect of Work assessment to EEA migrants who have been claiming JSA since before 1 January 2014. This assessment is already in place for EEA migrants who have been claiming JSA since 1 January 2014.

2.92 Access to benefits – From April 2015, self-employed Working Tax Credit (WTC) claimants will need to register their self-employment with HMRC for Self Assessment purposes and provide a Unique Tax Reference number in order to be able to claim. Those declaring income less than the equivalent of working 24 hours a week at the National Minimum Wage (NMW) will also be required to provide evidence to HMRC that the work they are undertaking is genuine and effective.

2.93 Taxation of the Bereavement Support Payment (BSP) – The Pensions Act 2014 legislated for the new BSP. The BSP will replace the 3 current benefits paid in respect of bereavement from April 2017. The Autumn Statement announces that the BSP will be exempt from Income Tax. (Finance Bill 2015)

Work incentives

2.53 Abolish employer National Insurance contributions up to the upper earnings limit for apprentices aged under 25 – The government will abolish employer NICs up to the upper earnings limit for apprentices aged under 25. This will come into effect from April 2016.

2.89 Extension of the New Enterprise Allowance scheme to dependent partners – Dependent partners in a couple’s JSA or ESA claim will be able to access the New Enterprise Allowance scheme. The scheme supports benefit claimants who want to start their own business.

2.227 Careers advice – The government will invest £20 million to improve careers advice and support for young people.

2.229 Childcare Business Grant scheme extension – The government will fund a £2 million extension of the existing Childcare Business Grant scheme to cover 2015-16, doubling the funding available through this scheme to support the creation of new childcare places.

2.231 Back-to-work support for older workers – From April 2015 the government will pilot career change work experience and training opportunities for older benefit claimants to help them gain the experience and training they need to re-skill and get back to work

2.233 Intensive activity period for young people – From October 2015 jobseekers aged 18 to 24 who are not in education, employment or training before claiming Universal Credit will participate in a period of intensive activity and job search support at the start of their benefit claim.

2.234 National Minimum Wage – The government will increase funding by £3 million in 2015-16 to improve enforcement of the NMW.

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