ESA & Employer’s Sick Pay

I have seen some confusion on here about ESA and Employer’s Sick Pay. I was recently challenged by DWP as I was getting sick pay from work, exceeding £16000 pa and full contribution ESA in the support group. Fortunately I had checked with DWP about my eligibility, and recorded that information, before getting ESA and DWP have written back to me confirming that I am still eligible for ESA.

Also the ESA regulations switch between the terms Personal Insurance and Permanent Health Insurance when saying what is and is not allowed.
My understanding of the situation is In Chapter 3 Para 95.2.(b) of the ESA guidelines it states
Earnings” are not to include—
(a) subject to paragraph (3), any payment in kind;
(b) any remuneration paid by or on behalf of an employer to the claimant in respect of a period throughout which the claimant is on maternity leave, paternity leave or adoption leave or is absent from work because the claimant is ill;

Now there are a couple of key points here, the main one is that you are still an employee of the Company so payments are made through the company payroll and secondly that this is a contractural sick pay paid by your employer because you are of sick. Some employers confuse the situation because they use the term PHI to refer to these payments whilst legally it is actually not a PHI Scheme. Be very sure to clarify the position with your employers. Many of them use something like a Group Income Protection Pllan to fund this Sick Pay and that is okay as it is not a PHI policy.

Where you do not qualify for ESA is if your employment is terminated but you are then paid money for your period of sickness through a PHI policy, unless you have paid over half the premiums personally.

As always with ESA and DWP rules there are always rules in very obscure language and locations that can catch you out and rule out payments that are ruled in in another part of the system. So firstly check the position with your employers and then contact the DWP to ask for confirmation, if speaking to someone on the phone take note of their name, the time and date of the call and an outline of the call. If you think you are not being given the right advice then write to them so you have an official answer in writing.

Hope this helps.