ESA cont based about to stop

This is more an observation than a question:
I have a client on ESA cont based which is about to stop as she has been on ESA for a year. She has underlying entitlement to Carer Allowance. This will now be quite a complicated work out of what she and her partner are better off doing. Made me realise for some with underlying entitlement to CA there will be even more complicated problems of Carer Premiums and more importantly Severe Disability Premiums all being affected when ESA stops. Are there any figures to show how many underlying CA cases there are?

Will your client not be able to close her ESA claim (as her money may stop anyway if joint income now exceeds her applicable amount inc Carers premium) and instead actually claim the actual Carers Allowance money instead to prevent overlap? The CP should still be applied to HB/CTB etc.
Any thoughts on this would be appreciated guys and gals.

I am still waiting for other income details but have advised her to get the CA in payment. I would assume that it would be a notional income anyway if she didn’t do so. Fortunately this is not a case with a SDP as she only has DLA low care. However it does mean that it these types of cases clients will be very confused and could potentially lose quite a lot of income.

Ive only just had a look at the new time limiting regs for conversion cases but I think your client might be able to requalify for CBESA after time limiting stops it. The new regs have a modified version of s1A of the WRA for conversion cases, subsection 3 of which states “The fact that a persons entitlement ot a contributory allowance has ceased as a result of subsection (1) does not prevent his being entitled to a further allowance if he satisfies the first and second conditions set out in Part 1 of Schedule 1. Most conversion cases would struggle to meet the contribution conditions but your client’s CA entitlement would mean that the relaxation of the contribution conditions in reg 8 of the ESA regs would apply meaning he can use any tax year to meet the first condition (paid contributions) (see para (2)(a). No amendment of reg 8 in the consequential regs. Am I missing something?

Yes I am - not a conversion case is it! (sorry)

CESA claimants who have until now had an underlying entitlement to CA should, in most cases, be able to re-qualify for CESA each year with at most a loss of 12 weeks CESA which is arguably needed to break their claim each time.  That is due to the relaxation of the first contribution condition provided by, as Damian says, Reg 8(2)(a) ESA Regs.

What people need to do is request an explanation for how they satisfied the 1st and 2nd contributions conditions re their award of CESA which is coming to an end through time limiting.  That is needed because it is not safe to assume that their satisfaction of the 1st contribution condition re CESA in the past means that the same tax year can be relied on again under Reg 8(1) above.  Reg 8 was tightened from Nov 2010 by capping earnings at the rate of the Lower Earnings Limit (LEL) whereas before that date earnings were only capped by the Upper earnings limit (UEL).  That means someone awarded CESA before Nov 2010 could have paid Nics for much less than 26 weeks provided their earnings were high (I read somewhere that the period could be as little as 4 weeks if they earned the UEL in those weeks).  However, many, possibly most, of the people whose CESA is now ending through time-limiting will have previously satisfied the 1st contribution condition based upon having earned at least the LEL in at least 26 weeks in one tax year in the past.  It is those people who should be able to successfully re-apply each year for another 365 days of CESA provided they wait 12 weeks each time their CESA ends before re-applying.  That should restrict to only 12 weeks the loss of any SDP caused by the CA entitlement no longer being underlying due to the CESA stopping.

Such people appear to satisfy section 1A of the WRA 2007 because in the 12 weeks needed to break their claim each year their CA will be “paid” rather than underlying.  As a result they will receive credited earnings under Reg 7A Credits Regs 1975 which when added to the credited earnings they receive each tax year for CESA will satisfy the 2nd contribution condition as modified by the new section 1A WRA 2007.

Even a break of 12 weeks will be unnecessary if Reg 13 ESA Regs applies to such people.  But it’s unclear whether Reg 13 does apply – may need to be tested at the UT.

Damian, they have removed Reg 8(2)(d) from the 1/5/12 which is very sneaky as that is the provision by which many non-carers could have satisfied the 1st contribution condition under section 1A(3)(a) of the WRA 2007.  Thankfully, carers rely on 8(2)(a) not (d).  8(2)(d) above removed by SI 2012/757.

Thanks for this information. My client may be better off on CA. However it is going to be a complicated issue for clients to deal with!