Income Protection Insurance (PHI?) and CB ESA

After searching the forum I've found a couple of threads on Permanent Health Insurance (PHI) but they don't answer my query. I'm asking about Income Protection Insurance, which sometimes also seems to be called PHI, although the terminology ahs confused me. Basically, it's a long term insurance which replaces a portion of your income if you are too ill to work.

As far as I can see from previous threads on this forum and from Googling, any payment from PHI can reduce a claimant's CB ESA. But it seems from what I've read that it will only reduce your CB ESA if your employer pays 50% or more of the premiums on the PHI.

So, if it is a PHI policy which you have organised yourself where you pay all the premiums, am I correct in thinking that it has no effect on CB ESA?

I've found the actual ESA regs now:

"72.—(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.

75. The following payments are to be treated as not being payments to which section 3 applies—
(a)..........
(f) any permanent health insurance payment in respect of which the employee had contributed to the premium to the extent of more than 50%."


So, presumably this means that if you arrange the policy yourself and pay all the premiums then there is no deduction from CB ESA?

asdman wrote:

I've found the actual ESA regs now:

"72.—(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.

75. The following payments are to be treated as not being payments to which section 3 applies—
(a)..........
(f) any permanent health insurance payment in respect of which the employee had contributed to the premium to the extent of more than 50%."


So, presumably this means that if you arrange the policy yourself and pay all the premiums then there is no deduction from CB ESA?

I would NEVER presume anything with the DWP I would get expert advise and something in writing from the DWP and still not trust them something like this could end in tears

Thanks, Gordon and originaldave

I'm going to contact a local welfare rights adviser as you suggest.

Please could you clear up something for me as this is a complicated area..

How would PHI payments to an employee (still technically employed i.e. receiving a payslip, paying NI etc) who is unable to work due to health problems affect Income Related ESA? Where the PHI was a Group policy and the premiums paid for by the employer.

I have read about its effect on contributions based but not income related.

many thanks