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Forum Home  →  Discussion  →  Work capability issues and ESA  →  Thread

Contributory ESA - second contribution condition

DDP
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Hi,

I have a client (aged 58) with a fairly extensive work history who recently (on 31 May 2015) left work due to incapacity. He will not qualify for income-related ESA as his income/capital is too high.

He has made a claim for contributory ESA from 1 June 2015. I don’t think there is a problem meeting the first contribution condition but there is an issue with the second. The DWP have used the tax years ending 5 April 2013 & 5 April 2014 to determine the second of the contribution conditions and have found that he does not qualify. His most recent employment had started in August 2013 – there was a gap from some time in 2011 until August 2013 when he was not in any work, nor was he claiming any benefits. We have written to the Contributions Agency to obtain his NI record but think that it is likely that the decision that he does not satisfy the contribution record is correct as the second contribution condition asks that “in each of the 2 complete tax years ending before the relevant benefit year you must have paid contributions, or received NI Credits, which produced an earnings factor of at least 50 times the lower earnings limit”.

As a precaution we have appealed the decision to find that the claimant is not entitled to contributory ESA whilst awaiting a copy of his NI record.

The claimant is currently receiving credits only claim.

My question is can my client make a new claim in January of next year when the new Benefit Year starts as he would, I think, satisfy the second contribution condition based on the tax years ending 5 April 2014 & 5 April 2015. Will he have to end the current credits only claim? Is it as simple as making a new claim in the new Benefit Year and relying on a different set of tax years or am I missing something?

Look forward to a response.

stevenmcavoy
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if he claims in 20016 then by my thinking his relevant tax years would be april 13 to april 14 and april 14 to april15.

with your time line does that still not mean he has no ni stamps from april 13 to august 13 which will mean he hasnt claimed or paid a stamp for 50 weeks?

DDP
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Hi Steven,

Thanks for the reply. My understanidng would be that as he was in work from August 2013 then in theory he could produce an earnings factor of at least 50 times the lower earnings limit for the year in question in a single week or any number of weeks during the tax year so long as it satisfies the condition of being 50 times the lower earnings limit for the year in question.

Does that make sense?

If that is correct then going back to my original post can he break his claim and simply make a new claim in 2016 to include the tax years ending April 2014 & April 2015?

Anyone got any practical experience of such a situation?

Tom H
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DDP - 03 July 2015 01:59 PM

..Is it as simple as making a new claim in the new Benefit Year and relying on a different set of tax years or am I missing something?

You’re not missing anything.

DDP - 06 July 2015 05:01 PM

... in theory he could produce an earnings factor of at least 50 times the lower earnings limit for the year in question in a single week or any number of weeks…

Not in a single week.  The earnings in any week are capped by the UEL.

[ Edited: 6 Jul 2015 at 05:56 pm by Tom H ]
unhindered by talent
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I have helped a client to claim ESA in a later benefit year than the first claim and it succeeded.

stevenmcavoy
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DDP - 06 July 2015 05:01 PM

Hi Steven,

Thanks for the reply. My understanidng would be that as he was in work from August 2013 then in theory he could produce an earnings factor of at least 50 times the lower earnings limit for the year in question in a single week or any number of weeks during the tax year so long as it satisfies the condition of being 50 times the lower earnings limit for the year in question.

Does that make sense?

If that is correct then going back to my original post can he break his claim and simply make a new claim in 2016 to include the tax years ending April 2014 & April 2015?

Anyone got any practical experience of such a situation?

mine is that it needs to be done for all of the 50 weeks so a gap of 3 weeks in any year would stop you.

i could be wrong though.

DDP
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Thanks Tom.

Not in a single week.  The earnings in any week are capped by the UEL.[/quote]

That makes sense.

stevenmcavoy
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Tom H - 06 July 2015 05:50 PM
DDP - 03 July 2015 01:59 PM

..Is it as simple as making a new claim in the new Benefit Year and relying on a different set of tax years or am I missing something?

You’re not missing anything.

DDP - 06 July 2015 05:01 PM

... in theory he could produce an earnings factor of at least 50 times the lower earnings limit for the year in question in a single week or any number of weeks…

Not in a single week.  The earnings in any week are capped by the UEL.

so if the lower earnings limit at the moment is £112 * 50 = £5,600 then you only need to have paid earnings on wages of that amount in that year to meet the second tax via salary alone?

other wise though im right in thinking though that you need to have been claiming for 50 weeks if you were intending to do it via a benefit credit stamp alone in any tax year?

 

Tom H
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That’s right Steven.

DDP
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Hi Steven,

so if the lower earnings limit at the moment is £112 * 50 = £5,600 then you only need to have paid earnings on wages of that amount in that year to meet the second tax via salary alone?

other wise though im right in thinking though that you need to have been claiming for 50 weeks if you were intending to do it via a benefit credit stamp alone in any tax year?
[/quote]

I think that is correct.