Incap benefit and income protection insurance.

Can you get incap benefit and income protection insurance? When I took out the private income protection for ill health insurance I was told you can as the insurance pays maximum 55% of your salary - and was designed to be taken with incap benefit.

When I first claimed incap benefit I was still in receipt of half pay but my SSP had stopped. I was surprised I could take benefits when getting over £800 a month in pay but was told it was not a means tested benefit and I needed to claim or I would lose my stamps etc.

So I claimed and after a while my pay stopped and I had to then apply for my insurance policy to pay out - which it did - I told them about this at the job center (pathways to work interview) and they were fine about it - entered it into their little income machine thingy that tells you if better off in work.

But since then I have had nothing from them and I am starting to worry that you cannot claim incap and have this insurance. The two together are still nowhere near my wage and they go on keeping me in my home - if either stopped I would have to sell the house and apply for social housing - but I am worrying about this and don't know who to ask. I am scared that I could have to pay the incap back!

Cheers.

Hi Rachel,

Health insurance payments are take into account when deciding how much IB a claimant receives in most cases. Usually, your IB is reduced by half the amount of any payment over £85 a week, but there are exceptions.

If you declared your pension and it should have been taken into account but wasn't, then that would be likely to count as official error and you woudl not be liable to repay any overpayment - always provide that it was accepted that you had informed the DWP.

You need to try to get advice as soon as possible about this and inform the DWP if you think you may be being overpaid.

Good luck,

Steve

Hi Steve,

What is panicking me is I don't remember whether I did or didn't tell them officially when it changed from wages to my income protection insurance. I had a breakdown and had to leave a very stressful job so my mind was in bits.

When I started claiming it I was earning £800 plus a month wages - as I was on half pay. I told them that and they said I would still get the full amount as they didn't take wages into account as it was not a means tested benefit and as long as my SSP had stopped I would get paid full inacp.

I was on it for about six months before my wages stopped and my insurance kicked in. I did get a form where I had to tick if I had any other certain kinds of income but none of them were insurance protection - you mention pension - that was one of them but it is not a pension. It is a private income protection insurance policy. I used to work in finance so the idea was always that they were set up bearing in mind that claimants would also be getting full invalidity and then, as it became, full incap benefit. So the insurance companies were not allowed to pay over 55-60% of a persons net wage by the government. The rational being that if a person could get higher payments and incap benefit then they would have no incentive to find work.

I am really panicking now as I don't think my pathways interview was properly telling them and know I have to ring them to make sure they have all the right info etc but I am scared - i have heard about people going to jail etc. Do you think I should go to citizens advice?

Thanks again.

Rachel.

Rachel

Perhaps this extract could be of some help to you.
"2.5 Reduction for pension payments
If a person's entitlement to Incapacity Benefit starts on or after 6 April 2001, her/his benefit may be reduced if s/he receives one of the following at over £85 gross per week:

personal pension;

occupational pension;

public service pension;

permanent health insurance arranged by an employer which provides payments in connection with ill health or disability after her/his employment ends.
However, if s/he contributed more than 50 per cent of the premiums, the amount s/he receives from this pension will be ignored.
Other types of pension, including one off lump sum payments, are ignored. If a person is entitled to the highest rate of DLA care component, all pension payments are ignored.
If a person has a gross pension of over £85 per week, Incapacity Benefit will be reduced by half of the difference between the pension and £85.
Example
Pension                       £95 per week
Difference                   £95 less £85 = £10 x 50% = £5
The reduction in Incapacity Benefit is £5.
2.5.1 Entitlement to Incapacity Benefit prior to 6 April 2001
Where a person has been continuously entitled to Incapacity Benefit since prior to 6 April 2001, pension payments will not affect Incapacity Benefit entitlement. If the claim is broken but the person later re-qualifies for Incapacity Benefit, pension payments can still be ignored if the periods of incapacity can be linked."

Hi Steve,


Thanks so much for your help. It gave me the courage to actually ring the DWP on their benefits advice line. I sat down and thought back to that (very bad time) long and hard and remembered I DID tell them - I rang them when my wages stopped and I applied for my insurance and I also told my pathways to work advisor twice when he was doing the 'better off in work'' calculations. He actually took the insurance I received out as it clearly showed I would not be better of back in work on a minimum wage job - but I DID tell him.

The Benefits Enquiry Line said they have nothing in writing about private individual plans taken out!! But the very fact that if you have paid in only 50% to a group PHI plan means your income from it is not counted then he said the fact that I paid 100% of my premiums means mine definitely wont. I actually rang back and checked again I was so worried and got same answer - that it wouldn't count from a different operator.

In the morning I had rung CAB and they rang me back after speaking to the benefits enquiry line and they told me same thing - as far as they were aware it wouldn't count. They also told me not to panic as I had told the DWP and as everything is done by phone these days it would be hard for them to prove that I hadn't. So I am feeling much better about it.

Thanks so much for your help.

Rachel.

KAA wrote:

Rachel

Perhaps this extract could be of some help to you.
"2.5 Reduction for pension payments
If a person's entitlement to Incapacity Benefit starts on or after 6 April 2001, her/his benefit may be reduced if s/he receives one of the following at over £85 gross per week:

personal pension;

occupational pension;

public service pension;

permanent health insurance arranged by an employer which provides payments in connection with ill health or disability after her/his employment ends.
However, if s/he contributed more than 50 per cent of the premiums, the amount s/he receives from this pension will be ignored.
Other types of pension, including one off lump sum payments, are ignored. If a person is entitled to the highest rate of DLA care component, all pension payments are ignored.
If a person has a gross pension of over £85 per week, Incapacity Benefit will be reduced by half of the difference between the pension and £85.
Example
Pension                       £95 per week
Difference                   £95 less £85 = £10 x 50% = £5
The reduction in Incapacity Benefit is £5.
2.5.1 Entitlement to Incapacity Benefit prior to 6 April 2001
Where a person has been continuously entitled to Incapacity Benefit since prior to 6 April 2001, pension payments will not affect Incapacity Benefit entitlement. If the claim is broken but the person later re-qualifies for Incapacity Benefit, pension payments can still be ignored if the periods of incapacity can be linked."

Thank you KAA for your detailed explanation to Rachel. We are always happy for members to give advice to other members.

Best wishes.

Jim