Reduced Earnings Allowance

Reduced Earnings Allowance is a tax-free benefit payable to a person who:

A person who is unable to return to their regular job or do work of the same standard as a result of the effect of their disablement caused by an accident at work or a prescribed industrial disease which happened or started before 1 October 1990.

A Medical Adviser advises on the customer's capacity for work.

The disability must be assessed at 1% or more.

Reduced Earnings Allowance is claimed on form BI103 as soon as possible after you suffer a loss of earnings.

If a claim is made over three months from the date on which you first suffer an earnings loss it will be treated as a late claim.

Payable every 4 weeks, every 13 weeks or every week by direct payment to an account.

Payment can be combined with Industrial Injuries Disablement Benefit if appropriate.

For a period determined by the decision maker at the time of the award.

A further award can then be applied for.

It can only be paid after pensionable age (60 for a woman, 65 for a man) if a person continues in regular employment. By regular employment we mean working either under a contract of service or being self employed for an average of 10 hours or more a week in any period of 5 consecutive weeks. Any week where absence is permitted under the contract e.g. for sickness or leave is disregarded.

N.B. A break in regular employment even for 1 day will result in the termination of Reduced Earnings Allowance.

Generally if a person reaches pensionable age and is not in regular employment Reduced Earnings Allowance will stop and be replaced by Retirement Allowance.

Benefit is not payable until the 91st day (i.e. 15 weeks excluding Sundays) after the date of the accident or the onset of the prescribed disease.

£54.72 Maximum rate

The amount payable depends on earnings before and after the accident (except in cases where you are found incapable of all work).

Reduced Earnings Allowance does not affect your or your partner's rights to other Social Security or War Pension Benefits, with the exception of Income Support / Jobseeker's Allowance (Income based), Housing Benefit and Working Tax Credit.