Means test in the context of Red tape


Means test in the context of Red tape

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⭐ Core Definition: Means test

A means test is a determination of whether an individual or family is eligible for government benefits, assistance or welfare, based upon whether the individual or family possesses the means to do with less or none of that help. Means testing is in opposition to universal coverage, which extends benefits to everyone. Means testing increases the administrative burden and can create perverse incentives.

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Means test in the context of Universal Credit

Universal Credit is a United Kingdom based social security payment. It is means-tested and is replacing and combining six benefits, for working-age households with a low income: income-related Employment and Support Allowance (ESA), income-based Jobseeker's Allowance (JSA), and Income Support; Child Tax Credit (CTC) and Working Tax Credit (WTC); and Housing Benefit. An award of UC is made up of different elements, which become payable to the claimant if relevant criteria apply: a standard allowance for singles or couples, child elements and disabled child elements for children in the household, housing cost element, childcare costs element, as well as elements for being a carer or for having limited capability to work-related activities, due to illness or disability.

The new policy was announced in 2010 at the Conservative Party annual conference by the Secretary of State for Work and Pensions, Iain Duncan Smith, who said it would make the social security system fairer to claimants and taxpayers. At the same venue the Welfare Reform Minister, Lord Freud, emphasised the scale of their plan, saying it was a "once in many generations" reform. A government white paper was published in November 2010. A key feature of the proposed new benefit was that unemployment payments would taper off as the recipient moved into work, not suddenly stop, thus avoiding a "cliff edge" that was said to "trap" people in unemployment.

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Means test in the context of Personal Independence Payment

Personal Independence Payment (abbreviated to PIP and usually pronounced as one word) is a welfare benefit in the United Kingdom intended to help working-aged people 16 and over with the extra costs of living with a health condition or a disability. It is available in England, Wales and Northern Ireland but not in Scotland, where Adult Disability Payment (ADP) is available instead.

It is non-means tested, non-contributory and tax-free; it is not linked to a person's ability to work and it is available equally to people in or out of work. It is not intended to be a substitute for a person's earnings, unlike Universal Credit, Employment and Support Allowance (ESA) or ESA's predecessor, Incapacity Benefit.

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Means test in the context of Mutual aid

Mutual aid is an organizational model where voluntary, collaborative exchanges of resources and services for common benefit take place amongst community members to overcome social, economic, and political barriers to meeting common needs. This can include physical resources like food, clothing, or medicine, as well as services like breakfast programs or education. These groups are often built for the daily needs of their communities, but mutual aid groups are also found throughout relief efforts, such as in natural disasters or pandemics like the COVID-19 pandemic.

Resources are shared unconditionally, contrasting this model from charity where conditions for gaining access to help are often set, such as means testing or grant stipulations. These groups often go beyond material or service exchange and are set up as a form of political participation in which people take responsibility for caring for one another and changing political conditions.

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Means test in the context of Basic income

Universal basic income (UBI) is a social welfare proposal in which all citizens of a given population regularly receive a minimum income in the form of an unconditional transfer payment, i.e., without a means test or need to perform work. In contrast, a guaranteed minimum income (GMI) is paid only to those who do not already receive an income that is enough to live on. A UBI would be received independently of any other income. If the level is sufficient to meet a person's basic needs (i.e., at or above the poverty line), it is considered a full basic income; if it is less than that amount, it is called a partial basic income. As of 2025, no country has implemented a full UBI system, but two countries—Mongolia and Iran—have had a partial UBI in the past. There have been numerous pilot projects, and the idea is discussed in many countries. Some have labelled UBI as utopian due to its historical origin.

There are several welfare arrangements that can be considered similar to basic income, although they are not unconditional. Many countries have a system of child benefit, which is essentially a basic income for guardians of children. A pension may be a basic income for retired persons. There are also quasi-basic income programs that are limited to certain population groups or time periods, like Bolsa Familia in Brazil, which is concentrated on the poor, or the Thamarat Program in Sudan, which was introduced by the transitional government to ease the effects of the economic crisis inherited from the Bashir regime. Likewise, the economic impact of the COVID-19 pandemic prompted some countries to send direct payments to its citizens. The Alaska Permanent Fund is a fund for all residents of the U.S. state of Alaska which averages $1,600 annually (in 2019 currency), and is sometimes described as the only example of a real basic income in practice. A negative income tax (NIT) can be viewed as a basic income for certain income groups in which citizens receive less and less money until this effect is reversed the more a person earns.

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