Incapacity Benefit (IB) replaced Sickness Benefit and Invalidity Benefit from 13 April 1995. It is paid to people who are assessed as being incapable of work and who meet certain contribution conditions.
There are three rates of Incapacity Benefit. There are two short-term rates: the lower rate (IBST(L)) is paid for the first 28 weeks of sickness and the higher rate (IBST(H)) for weeks 29 to 52. The long-term rate (IBLT) applies to people who have been sick for more than a year. The higher short-term rate and the long-term rate are treated as taxable income. For the first 28 weeks of incapacity, people previously in work are assessed on the ‘own occupation’ test, i.e. the claimant’s ability to do their own job. Otherwise incapacity is based on the ‘personal capability assessment’ (formerly ‘all work test’), which assesses ability to carry out a range of work-related activities. The test applies after 28 weeks of incapacity or from the start of the claim for people who did not previously have a job. Certain people are exempt from the personal capability assessment. These include, those in receipt of the Disability Living Allowance care component at the higher rate, those registered blind, and those suffering from a severe illness (for example tetraplegia, persistent vegetative state, dementia).
Increases are paid for a dependant who is caring for a child or where the spouse is aged 60 or over. Increases for children are paid with the short-term higher rate and with the long-term rate. With the introduction of the new Child Tax Credit on 6 April 2003 no new child dependency increases were awarded, although all existing increases were transitionally protected. An age addition is paid with the long-term rate.