Reduced Earnings Allowance

If you are eligible for Reduced Earnings Allowance, you could claim up to £75.44 per week (as of 2022). Know your eligibility & claim laws in UK here.
  • Author: Siva
  • Last updated: May 31, 2022
  • 4 Minutes
reduced earnings allowance in UK explained by Papershift

More people than ever are on benefits or seeking additional financial support in light of the financial struggles they face from COVID-19 and the cost-of-living crisis. For those who are struggling, Reduced Earnings Allowance (REA) is a benefit available to them if they cannot earn as much as they normally do due to an injury or disease caused by work.

But what exactly is Reduced Earnings Allowance and how can you benefit from it? To answer these questions and more, we’ve developed this handy guide. In it you will find information about how much REA is, what the eligibility criteria are, as well as details of how to claim.

Let’s begin.  

What is Reduced Earnings Allowance?

Reduced Earnings Allowance is a benefit available to those whose earnings are reduced because of an accident or disease or become unable to work at all for these reasons.

You can only get Reduced Earnings Allowance for accidents and diseases related to work which started on or before October 1, 1990.

The amount of Reduced Earnings Allowance you will receive is based on how much you earn in your normal employment and will be assessed before payments are made.

How much is Reduced Earnings Allowance?

If you are eligible for Reduced Earnings Allowance, you could claim up to £75.44 per week (as of 2022).

What you will get depends on how much you earned whilst in regular employment. The level of disability or illness (as assessed by a medical examiner) has no bearing on how much you receive so long as you are deemed to be at least 1 per cent disabled.

What if I am over retirement age?

Reduced Earnings Allowance will be replaced by another benefit called Retirement Allowance if both the following apply:

  • You reach State Pension age
  • You are not in regular employment.

Retirement Allowance is a reduced rate of Reduced Earnings Allowance. This is paid at a rate of 25 percent of the amount of Reduced Earnings Allowance. At its full amount this equates to £18.86 for the tax year 2022 to 2023.

Can Reduced Earnings Allowance affect my other benefits?

Reduced Earnings Allowance may impact on other income-related benefits you or your partner receives. If you receive any benefits that are means-tested, Reduced Earnings Allowance will count as income and may reduce the amount of money you receive.

Who is eligible for Reduced Earnings Allowance?

Reduced Earnings Allowance is a benefit available to individuals when their earnings are reduced. 

To be eligible you must have an illness or disability caused by a work-related accident or disease which happened before October 1, 1990.

You must also meet all of the following conditions:

  1. Your level of disability is assessed to be at least one percent. This will be assessed by a qualified medical adviser. The amount you receive does not change if your disability level is higher.
  2. You are unable to return to your regular occupation due to the illness or injury.
  3. You cannot do other work with the same level of earnings as your regular occupation.

How do I claim Reduced Earnings Allowance?

You can claim Reduced Earnings Allowance by filling in and posting a claim form. It’s important to claim straight away or you could lose the benefit.

To get the claim form you need to contact the Industrial Injuries Branch or your local Jobs and Benefits office. You can also download a form the local government website.

You’ll need to prove your identity when making a claim. You’ll also have to answer questions about your circumstances and background and provide official documents to support that information. The form comes with notes that will help you to fill it in as well as details of where to send it.

To claim, print out and fill in the claim form before posting it to the office whose details are shown in the details section or hand it in at your nearest Jobs and Benefits office.

What can I do if I am ineligible for Reduced Earnings Allowance?

If you are told that you cannot claim Reduced Earnings Allowance, there are a few other benefits you may be able to claim.

You may be entitled to get Industrial Injuries Disablement Benefit (IIDB) if you become ill or are disabled because of an accident or disease. This can be either at work or on an approved employment training scheme or course.

The amount you would receive from this benefit is based on your individual circumstances, but you can claim up to £182 per week if you are assessed as 100 percent disabled. Assessment will be conducted by a medical advisor and each claimant is rated on a scale of one to 100 percent. The higher the percentage the more you will receive.

How is Reduced Earnings Allowance paid?

Direct Payment into a bank or building society account is the normal way of receiving the benefit. This will be done once a month.

When does Reduced Earnings Allowance stop?

You lose your eligibility for Reduced Earning Allowance if you leave the United Kingdom to live elsewhere. The same applies if you go overseas to live permanently outside the European Economic Area. The EEA includes all countries in the EU, Norway, Liechtenstein, and Iceland.

As a rule, you can claim for the first 3 months of your stay when making temporary visits abroad. It can be longer for certain circumstances. 

In conclusion

Reduced Earnings Allowance can be a godsend to those who’s ability to work is impacted due to a workplace injury or illness. 

We hope you’ve enjoyed this guide. For more useful workplace information and guides for both employees and small and medium-sized business owners, check out the rest of our website.

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Written by Siva

I write & describe the value & benefits delivered by Paperhift's rota planning, staff time tracking, and employee payroll management software. Especially useful for Shift Planners, Rota Managers, Team Admins, and HR Teams :-)