Glossary of benefit terms and acronyms

Whether you’re an old hand or a new starter this searchable glossary of benefit terms, acronyms and abbreviations is sure to come in handy. Have we missed something?  Please let us know here.

Key wordDefinition
Alternative Payment Arrangements (APAs)A general term for three non-standard methods for paying Universal Credit to a claimant:

- Paying the housing element of Universal Credit straight to the landlord
- Paying Universal Credit fortnightly (or occasionally weekly) instead of monthly
- Splitting Universal Credit payments between a couple, rather than paying to one of them.
Applicable AmountAlso known as Needs Side or Assessment of Need, or in Universal Credit as Universal Credit Maximum Amount. This is the amount allowed for living expenses in the calculation of benefit entitlement. As such, it is the maximum possible award a person can receive given their circumstances before accounting for any income they may have. Different personal circumstances – such as a child, a disability, or if the claimant is a carer – add different amounts to the total applicable amount. The applicable amount is one half of the benefit entitlement calculation: see Income, for the other.
Assessment of NeedSee Applicable Amount.
Benefit and Budgeting Calculator (BBC)A calculation engine used by Policy in Practice for its analytical modelling.
Benefits UpratingThe process by which benefit awards are increased annually, normally by a measure of inflation. Recently, some benefits uprating has been prevented by the benefits freeze but has now been re-instated.
Child ElementPart of the calculation of the Universal Credit applicable amount. It is given to families who have a child. The 2020-21 value is £2,830 per annum per child. There are limits to this support - see Two Child Limit.
ConditionalityA principle where the payment of benefits is conditional upon the claimant meeting particular obligations. For example, applying for a certain number of jobs in order to receive Jobseeker’s Allowance. Conditionality also sets the number of hours a person is expected to work given their circumstances.
Council Tax Benefit (CTB)A means-tested benefit which provided help with paying council tax before it was abolished in 2013. It was replaced in Wales and Scotland by Council Tax Reduction Schemes, designed by the devolved administrations, and by local Council Tax Reduction Schemes designed by individual local authorities in England.
Council Tax Reduction Scheme (CTRS/CTR/CTS)Also known as council tax reduction (CTR) or council tax support (CTS), this is a type of support which provides for council tax to be reduced in certain defined circumstances. It is administered by local authorities separately from the benefit system, but the calculation depends on whether applicants receive legacy benefits (see below) or Universal Credit (see below).
Council Tax BandEach domestic property in Great Britain (Northern Ireland uses a different system) is placed into a bracket of value, or band, which determines the council tax liability for that property.
CTR ExtractA dataset used by Policy in Practice for this analytical project.
DependantThis is a household member who relies on another person, usually a family member, for financial support and is therefore not expected to contribute to household income. In the benefits system, a dependant is usually a child or a young person in education or training.
Disability BenefitFor the purposes of this report, this is a collective term for Disability Living Allowance (DLA), Personal Independence Payment (PIP), Armed Forces Independence Payment (AFIP), and Attendance Allowance (AA).
Disability PremiumAn additional benefit component which can be added to certain legacy benefits (see below), but only if the claimant is under pension age, and either blind or receiving DLA (see below), PIP (see below), Attendance Allowance or certain other disability benefits.
Disability Living Allowance (DLA)Disability Living Allowance. This is a non means-tested, non-taxable benefit paid to people who need supervision or help with their daily or nightly care, or who have mobility problems. It has now been replaced for most working-age people by Personal Independence Payment (PIP) but is still paid for children.
Department for Work and Pensions (DWP)A UK Government department, responsible for most legacy benefits in the UK and leading on the delivery of Universal Credit.
Employment & Support Allowance (ESA)A benefit paid to working-age people who have an illness, health condition or a disability which makes it difficult or impossible to work. Contribution-based Employment and Support Allowance (also known as New-Style ESA) is not means-tested but based on National Insurance contributions. Income-related Employment and Support Allowance (also known as Old-Style ESA) is means-tested and is one of the benefits being replaced by Universal Credit.
ESA Work-Related Activity ComponentAlso known as WRAG Premium. This was a part of the applicable amount (see above) in legacy benefits and council tax reduction awards. It was a supplementary component of ESA (see above), intended to support those preparing to return to work. It was abolished for new claimants by the UK Government in April 2017. Whilst this is no longer added to the applicable amount in legacy benefits, in Wales a household’s eligibility for WRAG Premium is still included in the council tax reduction applicable amount calculation for applicants receiving legacy benefits. However, it is not included if the council tax reduction applicants are receiving Universal Credit. The result is that council tax reduction applicants receiving legacy benefits are treated more generously than those receiving Universal Credit.
Enhanced Disability PremiumAn additional benefit component which can be added to certain legacy benefits, but only if the claimant is under pension age, and receives either Disability Living Allowance (see above), Personal Independence Payment (see above), or Armed Forces Independence Payment.
Extended PaymentsAlso known as the run on, these are additional payments of council tax reduction award. When a claimant moves into work or increases working hours above 16 hours per week, subject to certain qualifying conditions, payments of benefit are made at the out-of-work rate for a four-week period. The Welsh Government allowed Welsh local authorities to extend this grace period for council tax reduction awards if they chose, but none have.
Family PremiumThis was an additional component for families with children in the applicable amount for legacy benefits and council tax reduction. It was awarded to families on the birth of their first child (each family could receive only one Family Premium; additional children made no difference). It was abolished by the UK Government in 2016 for all new claims. NB Whilst the premium is no longer added to the applicable amount in legacy benefits, in Wales a household’s eligibility for Family Premium is still included in the council tax reduction applicable amount calculations if that household is receiving legacy benefits. However, it is not included if the council tax reduction applicant is receiving Universal Credit. The result is that council tax reduction applicants receiving legacy benefits are treated more generously than those receiving Universal Credit.
Flat-Rate Non - Dependant DeductionThis is a type of non-dependant deduction. See non-dependant deduction below.
Guaranteed AwardA minimum award guaranteed for all households in receipt of means-tested benefits and with income below a set threshold. This allows for easy communication of eligibility, for example, if you earn below this much, you will receive at least this much.
Housing AssociationNot-for-profit organisations which own, let, and manage rental homes. Homes rented from housing associations are known as social housing, along with council-owned properties. Whilst both types of social housing offer accommodation at below market rates, housing association rents tend to be higher than council house rents.
Housing BenefitAn income-related (means-tested) benefit paid to tenants on low incomes (either in or out of work) to help pay their rent. The scheme is administered by local authorities in accordance with national legislation and is replaced by the housing element in Universal Credit.
Her Majesty’s Revenue and Customs (HMRC)A UK central government department responsible for tax calculation and collection. HMRC tracks information about earnings through the pay as you earn system and this data is used by DWP (see above) in the calculation of Universal Credit.
IncomeIn the calculation of Universal Credit, most types of income a claimant receives are taken into account and subtracted from the applicable amount (see above). The remainder following this calculation is what the claimant receives as their UC award. The idea is that income that could be used to meet living costs should be subtracted from the applicable amount.
Income-Banded SchemeAn alternative way of calculating council tax reduction award for households and is increasingly popular with local authorities in England due to challenges with the current assessment process (see Universal Credit Assessment Period). Schemes vary, but essentially involve placing applicants into one of several income bands to calculate their award, instead of making bespoke calculations using each individual’s exact income. This makes award amounts more stable for the applicant month-to-month, and means reassessments are needed less frequently, which makes administration easier and less costly.
Income Support (IS)An income-related (means-tested) benefit paid to working-age people on low income such as carers and lone parents. It is not usually paid to someone receiving Jobseeker’s Allowance or Employment and Support Allowance. It is one of the benefits being replaced by Universal Credit.
Jobseeker’s Allowance (JSA)An income-related benefit paid to working-age people on low income who are out of work and actively seeking work. Contribution-based Jobseeker’s Allowance is not means-tested but based on National Insurance contributions. Income-based Jobseeker’s Allowance is means-tested, and is one of the benefits being replaced by Universal Credit.
Legacy System/BenefitsThis is a general term for benefits and credits that have been or will be replaced by Universal Credit.
Limited Capability for Work (LCW)A possible outcome of a work capability assessment (see below) in which a claimant is deemed to be too ill or disabled to work, but capable of undertaking work related activity. These claimants are then placed into a WRAG (see below).
Limited Capability for Work Related Activity (LCWRA)A possible outcome of a work capability assessment (see below) in which a claimant is deemed not only too ill or disabled to work, but also too ill or disabled to perform work-related activity, such as preparing to move into work in the future. Claimants who are deemed to have LCWRA receive increased benefits as a result, and these benefits have no conditionality (see above) attached to them.
Local Housing Allowance (LHA)A way of calculating Housing Benefit or the housing element of Universal Credit for a claimant who rents property from a private landlord. LHA rates are based on the number of people in the claimant’s household, and the area where they live. LHA amounts were based on the 30th percentile of rents in the local area before being restricted to inflation-related increases from 2013, and then subject to the benefits freeze from 2016. From 1 April 2020, as part of the measures to support people through the COVID-19 pandemic, LHA rates have again been paid at the 30th percentile of local rents. If the claimant chooses to rent a property which costs less than the appropriate LHA rate, the amount they receive is restricted to the actual rent they pay.
Managed Migration or Move to UCThis is the process of actively moving claimants from legacy benefits to Universal Credit, despite nothing having changed in the claimant’s circumstances. Managed Migration, now known as Move to UC began with a pilot from July 2019 and is currently expected to start fully at the end of 2020. This is distinct from Natural Migration (see below).
Maximum Amount (Universal Credit)An amount used in council tax reduction calculations for applicants receiving Universal Credit. It is the theoretical maximum amount a person could receive under Universal Credit if they had no other income and is used as part of the calculation of council tax reduction.
Ministry of Housing, Communities and Local Government (MHCLG)A central UK Government department, previously known as Department for Communities and Local Government (DCLG).
Minimum AwardSee Guaranteed Award.
Minimum Income Floor (MIF)A mechanism used in the calculation of Universal Credit for self-employed claimants, and also in the calculation of council tax reduction award for Universal Credit claimants. It works by assuming a certain level of income after a year-long grace period. The level of income is calculated using the National Minimum Wage for the applicant’s age group, multiplied by the number of hours they are expected to look for and be available for work.
Natural MigrationThis is when a benefit claimant moves from legacy benefits (see above) to Universal Credit (see below), triggered by a change in their circumstances (e.g. the birth of a child). This is distinct from Managed Migration (see above).
Non-DependantA person living as a member of the claimant’s household, but who is not their partner, their child, or a young person for whom the claimant is responsible. There are certain exceptions, such as joint-occupiers, boarders, and paid carers.
Non-Dependant DeductionA deduction made to benefit payments based on the expected contribution from other adults (i.e. non-dependants) in the household. Usually, the rate of deduction is based on the income and circumstances of the non-dependant, but an alternative approach is the flat-rate non-dependant deduction, where the rate of deduction is the same for everyone deemed due to receive one.
Out-of-Work BenefitsThis is a general term for benefits which apply only when the claimant is not in employment. This includes Jobseeker’s Allowance (see above), Employment Support Allowance (see above), and parts of Universal Credit (see below).
Personal Independence Payment (PIP)A replacement benefit for Disability Living Allowance (see above), designed to provide help to people over 16 who need care or who have mobility needs. It is not means-tested or taxable.
Run-OnSee Extended Payments.
Severe Disability Premium (SDP)This is an additional benefit component which can be added to certain types of benefit, but only if the claimant receives either DLA (see above), PIP (see above), or Attendance Allowance. The SDP can be applied to IS (see above), JSA (see above), ESA (see above), Housing Benefit (see above), or Pension Credit. It is generally paid where a claimant has no one else living with them.
Single Housing Benefit Extract (SHBE)A Housing Benefit dataset collected by local authorities and used by Policy in Practice for this analytical project.
Taper RateThe rate at which benefits are withdrawn when a claimant has earned income above the level of the applicable amount. If a taper rate is 20%, for every £1 additional income earned, support reduces by 20p. The lower the percentage rate, the more generous the scheme. Taper rates are applied so that people feel the benefit of work and avoid the risk of being worse off when starting work, which could be the case if there was no taper and benefits were withdrawn pound for pound. A taper rate applies for most earned income, but there is an exception in some cases where a Work Allowance applies (see below).
Two-Child LimitA limit to the support provided by the child element of Universal Credit (and tax credits). The limit means the Universal Credit applicable amount recognises only the two eldest children in a household so that only the first two children receive the child element. This has a knock-on effect on council tax reduction award for Universal Credit claimants. This limit only applies to third (or subsequent) children born after 6 April 2017. This limit is not applied to council tax reduction award for those receiving legacy benefits in but is incorporated in the council tax reduction award calculations for Universal Credit claimants.
Universal Credit (UC)An income-related (means-tested) benefit for people of working-age who are on a low income. It replaces four existing means-tested benefits, including Housing Benefit and two tax credits.
Universal Credit, assessmentThe process determining how much Universal Credit claimants will get. This takes a household’s applicable amount and subtracts their income from that amount. Whatever remains is the claimant’s Universal Credit award. Universal Credit awards are calculated using exact income amounts. This can be administratively costly for council tax reduction applications and require regular reassessments.
UpratingSee Benefits Uprating.
War Disablement Pensions (WDP)Types of benefit available to those who were injured or disabled during service in the British Armed Forces. The Welsh Government allows Welsh local authorities to be more generous than the standard £10 disregard of War Disablement Pensions received by these claimants when calculating their income for the purposes of council tax reduction. All local authorities in Wales are as generous as possible; disregarding 100% of these pensions.
War Widow’s PensionsTypes of benefit available to the widows, widowers or children of someone killed during service in the British Armed Forces, or from injuries thereafter. The Welsh Government allows local authorities to be more generous than the standard £10 disregard of War Disablement Pensions received by these claimants when calculating their income for the purposes of council tax reduction. All local authorities in Wales have chosen to be as generous as possible, disregarding 100% of these pensions.
Work AllowanceAn amount of money households in certain circumstances can earn without it causing their Universal Credit award to reduce. The main circumstances are a household with children, or people with limited capacity for work.
Work Capability AssessmentThis is a process where claimants who are ill or disabled are assessed on their capacity to work. There are three possible outcomes: claimants could be deemed fit to work, they could be deemed to have limited capability for work (see above), or they could be deemed to have ‘limited capability for work related activity’ (see above).
Work-Related Activity Group (WRAG)The Work-Related Activity Group is a category in which someone is placed after undergoing a Work Capability Assessment and being deemed to have Limited Capability for Work (see above). Until 2016, claimants in the WRAG received the WRAG premium (see below).
Work-Related Activity Group PremiumSee Employment and Support Allowance Work-Related Activity Component.

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