Permanent Health Insurance and Contribution Based

I have just received the dreaded letter regarding my transfer to ESA.

I had to stop work 15 years ago and was 'awarded' IB. I also receive income from a Permanent Health Insurance policy held by my company. The Insurers pay my company; my company pass it on via PAYE.

I read some vague comments about the PHI payments rendering me ineligible for ESA. If this really is the case I will spare myself the pain and stress of embarking on the process.

I have absolutely no idea where to look. Any help will be greatly appreciated.

Thanks

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Will my pension be disregarded?

Thanks for that ...... But is PHI a 'pension' ?

A minefield!

For contributory ESA purposes, PHI is treated as a pension.

"Permanent health insurance72.—(1) For the purposes of sections 2(1)(c) and 3 of the Act (deductions from contributory allowance) pension payment is to include a permanent health insurance payment.
(2) In this regulation “permanent health insurance payment” means any periodical payment arranged by an employer under an insurance policy providing benefits in connection with physical or mental illness or disability, in relation to a former employee on the termination of that person’s employment."
The Employment and Support Allowance Regulations 2008

Further explanation of how it affects you...PHI payments and pensions reduce your CESA. See here for how to calculate it.

If you were in receipt of your PHI before 2001, different provisions will apply.

"41. Contributory ESA customers and Incapacity Benefit customers who claimed after 2001 have
half the amount of any income from occupational pension over £85 per week deducted from
their contributory benefit. However Incapacity Benefit and Severe Disablement Allowance
customers who claimed benefit prior to 2001 or are entitled to higher rate care component of
DLA have any occupational pension fully disregarded. If, on migration to ESA, ESA rules are
applied to these customers, those with occupational pensions over £85 per week could see
a significant reduction in their benefit. Therefore to ensure that customers do not see a
reduction in their benefit on migration the occupational pensions disregard will be carried
forward into ESA for customers who currently have any occupational pension disregarded.
This will mean that there will be different rules for the treatment of occupational pension in
ESA until there are no customers with an occupational pension disregard remaining on ESA."

Explanatory memorandum to the Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit)(Existing Awards) regulations 2010
2010 No. 875