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TOPIC: ESA income related/HMRC & Pension Pot

ESA income related/HMRC & Pension Pot 3 months 2 weeks ago #206144

I contacted the DWP about 2 weeks ago and informed them of an ad hoc pension pot of £4,900 and they asked me to send evidence from the pension company and it showing being paid into my account and I sent this to them yesterday. Throughout last year I had been taking small ad hoc amounts I have no savings or capital. So throughout out last year and this year the amount has totalled £18,000 which includes the personal allowance of £11500. I received a call today from the DWP asking me to clarify payments from my pension. I told them I had sent the letter to them. I also told her that a further £800 was coming as well. The adviser asked if these were ad hoc payments and I said they were. She said they may have to reduce my ESA because of this. What I am finding I am doing more and more is relying on my pension to pay for everyday house bills and works blocked drains etc, as the ESA payment is not covering these. I called HRMC who advised me the ESA Income Related benefit is also taxable and that the DWP have been alerted to me going above a certain threshold and hence the phone call. I am not quite sure what to do as now I do not have £6000 in savings as most of this has been spent on bills etc. Please can you advise on the best way forward.

Kind regards
Spitfire

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ESA income related/HMRC & Pension Pot 3 months 2 weeks ago #206153

trainingisgood

I'll hope you will forgive me but I am totally confused by the figures that you have included in your post :(

The critical amounts for your total savings and assets for an Income Related ESA claim are £6000 and £16,000. If you have exceeded either of these amounts then the DWP need to be informed. I'm afraid I cannot work out from your post whether you have or not.

To correct the HMRC, who really should know better, ESA(IR) is not liable to tax, it is Contribution Based ESA that is taxable.

Gordon

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Nothing on this board constitutes legal advice - always consult a professional about specific problems

ESA income related/HMRC & Pension Pot 3 months 2 weeks ago #206205

Hi Gordon
Thank you for your reply and apologies for my confusion. Below is the calculation from HMRC showing what I had taken last year and start of this year which were ad hoc payments although it looks like I have taken monies out each month. I have written and spoke with the DWP. The adviser asked if these were ad hoc payments and they are. I have had to pay for repairs and pay back money borrowed and my pension is the only way I can do this. The DWP said that the pension is classed as income and itis probably because I have reached £18,400 that they have been alerted. She said to keep receipts and make a note of any outgoings. She said they may have to make an adjustment. Gordon I get totally confused with the £6000 and £16,000 amounts are you allowed to have £22,000 in total. I am sorry to hassle you again. I can't seem to find anywhere that helps only this brilliant forum.

This is the HRMC info:
This pension provider told us your taxable income between 17 August 2017 and 1 February 2018 is £18,400.

Date Taxable income (£) Income Tax paid (£) National Insurance paid (£)
Total 18,400.00 1,761.80

18 August 2017 5,000.00 1,057.66
7 September 2017 700.00 87.00
17 October 2017 200.00 -1,144.66
1 November 2017 2,000.00 237.20
7 December 2017 4,500.00 516.40
1 February 2018 6,000.00 1,008.20


Kind regards
Spitfire

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ESA income related/HMRC & Pension Pot 3 months 2 weeks ago #206216

trainingisgood

I think you are confusing yourself by the HMRC information, this is not relevant to your benefit claims.

The first issue is what type of ESA are you receiving, there are three options;

- Contribution Based ESA only
- Income Related ESA only
- ESA(CB) with an ESA(IR) an top-up

If you are only receiving ESA(CB) then your savings do not matter

If you are receiving ESA(IR) in part or in whole then your total savings and assets can effect the amount of ESA(R) that you receive. If your savings are in excess of £6000 then your ESA(IR) will be reduced and if it exceeds £16,000 then any ESA(IR) will be stopped. See

Asset and savings rule for ESA(IR)

Your post suggests that you are in excess of the upper limit! This could be a serious issue if you have not informed the DWP.

There is also an issue as to whether the pension amounts that you have taken are treated as being income or not, you describe them as ad hoc, providing this is accepted as being the case, then there should be no problem.

However if it is treated as income then it would be deducted £ for £ from any ESA(IR) For ESA(CB) there is an £85 per week disregard followed by a £1 deduction from your ESA(CB) for every £2 in excess of the £85.

Gordon

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Nothing on this board constitutes legal advice - always consult a professional about specific problems

ESA income related/HMRC & Pension Pot 3 months 2 weeks ago #206232

Thank you Gordon explained beautifully again. I have informed the DWP of any ad hoc payment. Thank you again

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ESA income related/HMRC & Pension Pot 3 months 2 weeks ago #206243

Gordon
I have just received letter from the DWP asking me to provide statements from April last year. This will show my tax free pension being paid to me which I did not inform the DWP about this was for £30,000 which £24,000 was paid towards a new kitchen. I am beside my self with worry do you know how I should proceed. Sorry to burden you again
Kind regards
Spitfire

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