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ESA and pension income and lump sum
- John R
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1 year 2 months ago #283445 by John R
ESA and pension income and lump sum was created by John R
Hi
My brother has been on ESA (support group) for many years. I assume this is the income-related sort? He currently gets £149 a week, plus housing benefit. He has no savings.
In April, he will be 60, and a local government pension he built up in the 1980s will become payable. He will get a £7320 lump sum and an annual pension of £2440 (less than £50 per week). My concern is the effect this will have on his benefits.
I have already made enquiries with the pension provider and he is not allowed to defer the pension.
So, my questions are how much is he likely to lose from his ESA and will it then affect his housing benefit? Also, might it trigger a re-assessment? He hasn't been bothered for about 10 years or more.
I have done some searching and get different views about the effect of the income part of the pension, from 0% up to 100% of the weekly pension income being deducted. Also, the lump sum will mean that he now has some savings of £7320. Presumably, he could spend some of that, to pay off debts, say, to get under any limit.
My brother has been on ESA (support group) for many years. I assume this is the income-related sort? He currently gets £149 a week, plus housing benefit. He has no savings.
In April, he will be 60, and a local government pension he built up in the 1980s will become payable. He will get a £7320 lump sum and an annual pension of £2440 (less than £50 per week). My concern is the effect this will have on his benefits.
I have already made enquiries with the pension provider and he is not allowed to defer the pension.
So, my questions are how much is he likely to lose from his ESA and will it then affect his housing benefit? Also, might it trigger a re-assessment? He hasn't been bothered for about 10 years or more.
I have done some searching and get different views about the effect of the income part of the pension, from 0% up to 100% of the weekly pension income being deducted. Also, the lump sum will mean that he now has some savings of £7320. Presumably, he could spend some of that, to pay off debts, say, to get under any limit.
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- Chris
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1 year 2 months ago #283454 by Chris
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Replied by Chris on topic ESA and pension income and lump sum
Hi John,
I would check with the DWP to see if it can be deferred for a year like some of the other benefits can. I got a backdated lump sum from PIP, and had a year where it wasn't classified as savings, but then after that, it goes as such:-
Under £6,000 - no affect, £6,001 - £16,000 then its £4.35 for every £250 ( I usually round this up to £20 for every £1,000 - helps work it out a bit easier ), over £16,001 - then no benefit entitlement.
If you are allowed the year, then at least it'll give you a bit time to sort things, but definitely get it in writing if you can, because in my experience it can come back to haunt you like it did me.
I read online that it was a year for £5,000, making me think that it was 2 years for £10,000 - and I ended up keeping it in a savings account, but I am now being penalised for it, close to £100 month deduction from my UC.
Hope this helps,
Regards, Chris.
I would check with the DWP to see if it can be deferred for a year like some of the other benefits can. I got a backdated lump sum from PIP, and had a year where it wasn't classified as savings, but then after that, it goes as such:-
Under £6,000 - no affect, £6,001 - £16,000 then its £4.35 for every £250 ( I usually round this up to £20 for every £1,000 - helps work it out a bit easier ), over £16,001 - then no benefit entitlement.
If you are allowed the year, then at least it'll give you a bit time to sort things, but definitely get it in writing if you can, because in my experience it can come back to haunt you like it did me.
I read online that it was a year for £5,000, making me think that it was 2 years for £10,000 - and I ended up keeping it in a savings account, but I am now being penalised for it, close to £100 month deduction from my UC.
Hope this helps,
Regards, Chris.
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- Gordon
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1 year 2 months ago #283466 by Gordon
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Replied by Gordon on topic ESA and pension income and lump sum
J
I think that Chris has misread your post, as this is a pension payment there will be no deferring.
The one-off payment is treated as capital and as it is over £6000 it will, with his other assets and savings result in a reduction of his ESA by £1/week for every £250 in excess.
The income will reduce any ESA(IR) payable £ for £.
If your brother is also entitled to Contribution Based ESA then this will limit the reduction.
Housing Benefit will not be affected providing his ESA(IR) remains payable.
Gordon
I think that Chris has misread your post, as this is a pension payment there will be no deferring.
The one-off payment is treated as capital and as it is over £6000 it will, with his other assets and savings result in a reduction of his ESA by £1/week for every £250 in excess.
The income will reduce any ESA(IR) payable £ for £.
If your brother is also entitled to Contribution Based ESA then this will limit the reduction.
Housing Benefit will not be affected providing his ESA(IR) remains payable.
Gordon
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- Chris
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1 year 2 months ago #283478 by Chris
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Replied by Chris on topic ESA and pension income and lump sum
Hi Gordon,
Apologies - I did indeed misread it having gone back on it now. The joys of only 3 hours sleep, lol.
I think as well, the fact that I still have so much more to learn, I'm maybe's trying to help, when I probably shouldn't be (answering certain posts).
Thank you again for rectifying - regards, Chris.
Apologies - I did indeed misread it having gone back on it now. The joys of only 3 hours sleep, lol.
I think as well, the fact that I still have so much more to learn, I'm maybe's trying to help, when I probably shouldn't be (answering certain posts).
Thank you again for rectifying - regards, Chris.
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- John R
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1 year 2 months ago #283670 by John R
Replied by John R on topic ESA and pension income and lump sum
Thank you Gordon. That is quite reassuring. If he loses £1/week for every £250, then I can arrange to top up the benefit from the lump sum at the same rate, and that can last over 5 years, almost getting him to state pension age.
Also, if he loses an amount of benefit equal to the pension income, then he's no worse off!
Also, if he loses an amount of benefit equal to the pension income, then he's no worse off!
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