urgent !!! ESA stopping

my client has started work and her IR/ESA has stopped due to income, if she stops work or reduces income form work can she go back onto ir/esa or has it stopped for good,
doe sit actually STOP when income goes too high or is it just put into limbo until circumstances change again ???
Thanks

Can I ask why you think an income-related ESA award is put into limbo when someone’s earnings exceed their entitlement?

A decision is made that your client is no longer entitled to ESA as they don’t satisfy the conditions of entitlement and that’s that as far as I can see. There is no possibility of using linking rules as no ESA claim is possible.

So I think it is Universal Credit now. See this thread from couple of years back https://www.rightsnet.org.uk/forums/viewthread/17240

Paul, I thought maybe ESA was just suspended as the claimant had not been found fit for work and it was just payability that was in issue, the 12 week linking would apply would it not, any way looks like UC but will my client be considered unfit for work on the basis of her closed esa award ??, if she has to go through wca again it could be very bad for her as she is working pt and needs the work element of UC now

In the same way that there are rules which allow a person to be ‘treated as’ having LCFW or LCFWRA where they do not score sufficient points under the WCA, there are rules which allow a person to be ‘treated as’ not having LCFW even where they have satisfied the WCA. One of those rules is that a person is ‘treated as’ not having LCFW if they do any work - unless that work falls within the permitted work rules.

So the actual position is that;
1. She no longer has LCFW as her work means she is ‘treated as’ not having LCFW.
2. Her ESA stops in consequence
3. If she claims UC she will need to go through the WCA again.

HI PC. she is in permitted work, its just that her wages exceeded the allowed amount !!!

Diogenes - 25 January 2024 10:57 AM

HI PC. she is in permitted work, its just that her wages exceeded the allowed amount !!!

But a person is only engaged in permitted work where they comply with the permitted work rules - one of which is that their earnings are below the specified threshold. If they exceed that amount, they are just working - and therefore are treated as not having LCFW (otherwise they could be earning £3k a week or something daft and still get ESA.)

Would you find this easier to grasp if we cited the relevant regulations?

oh yes pleas that would be very good

We start with reg. 40 Employment and Support Allowance Regulations 2008;

A claimant who works to be treated as not entitled to an employment and support allowance
40.—(1) Subject to the following paragraphs, a claimant is to be treated as not entitled to an employment and support allowance in any week in which that claimant does work.

(2) Paragraph (1) does not apply to—

(a)work as a councillor;
..........
(f)any of the categories of work set out in regulation 45 (exempt work).

Note that the ‘exempt work’ referred to in para. (2)(f) is what we call ‘permitted work’.

Then we have reg, 44;

Claimants who are treated as not entitled to any allowance at all by reason of regulation 40(1) are to be treated as not having limited capability for work

44.—(1) Where a claimant is treated as not entitled to an employment and support allowance by reason of regulation 40(1), subject to paragraph (2), the claimant is to be treated as not having limited capability for work.

(2) Paragraph (1) does not apply where the claimant remains entitled to a contributory allowance, but is not entitled to an income-related allowance by reason of regulation 40(1).

(3) Paragraph (1) applies even if—

(a)it has been determined that the claimant has or is to be treated as having, under any of regulations 20 (certain claimants to be treated as having limited capability for work), 25 (hospital in-patients), 26 (claimants undergoing certain regular treatment) or 29 (exceptional circumstances), limited capability for work; or
(b)the claimant meets the conditions set out in regulation 30(2) for being treated as having limited capability for work until a determination is made in accordance with the limited capability for work assessment.

lovely thanks, my client works as a councillor so how does affect the issue as it seems there is an exemption in the regs above, her allowanc e as a councillor is what caused the problem

Work as a councillor is not ‘permitted work’ - as in it is not the ‘exempt work’ that reg. 45 refers to. It would have been helpful if you had mentioned this at the outset, as the two things are different.

So the way it works for a councillor is;

- the work itself does not count - i.e. you are not treated as working or being employed because of the work and so cannot be ‘treated as’ not having LCFW on that basis*.

- some disregards apply to what the councillor is paid - i.e. travelling expenses and subsistence payments are ignored and it is possible that a basic councillor’s allowance might also be disregarded.

I had not considered this previously, but I can see no reason why the ‘work’ cannot be discounted because it is work as a councillor, whilst at the same time the earnings from that work fall under the permitted work rules. So it would be possible for a person to simultaneously have the benefit of both.#

But that isn’t going to assist if (after any councillor’s disregards are applied) the earnings exceed the permitted work limits.

(*whilst perhaps not relevant in the present case, it’s worth noting it is entirely permissible for the DWP to take into account the nature of a person’s work when assessing whether they have LCFW - if my case is I should score 15 points for activity 1 (a) and my permitted work is as a postie, that may call my statements into question, if I argue that I should score 15 points for activity 16 (a) my ability to fulfil my duties as a councillor may cast doubt on that)

(#though thinking about the way reg. 45 is structured, the work as a councillor would still have to be for less than 16 hours week for that to be the case)

thanks PC, yes sorry I was being a bit careful for diplomatic reasons, re; the councillor work, well it looks like as her wages are well above permitted work level its going to UC but if they apply the 3 month waiting period for WCA she wont get the work allowance so may be out of UC until that kicks in, she was not lcwa, gets pIP standard dl, pays £500 pm rent, looks like being a councillor may have been a bad financial move for her

PC UI understood all the councillor allowances were taken into account, you say the basic amount might be disregarded, how so ???????????????

Diogenes - 25 January 2024 12:37 PM

you say the basic amount might be disregarded, how so ???????????????

1. Any payment in respect of expenses “wholly, exclusively and necessarily incurred in the performance of the duties of the employment” is disregarded as earnings - see reg. 95 (2)(c) ESA Regs. This is where the disregard for travelling and subsistence expenses stems from. Note though, that this does require that the employee is either reimbursed those expenses or that they are itemised as separate payments when they are made.

2. The payment of a councillor’s attendance allowance (not the benefit Attendance Allowance, but what the are paid for attending - i.e. turning up and doing the job) is earnings.

3. The Local Authorities (Members’ Allowances) Regulations 1991 introduced a ‘basic allowance’ and though the terms of that were not defined, a government circular stated that part of the basic allowance (i.e. which is separate from the attendance allowance) was intended to compensate a councillor for meetings with constituents, political group meetings and the use of their own private telephone and stationery (nowadays I would imagine that would include home internet usage) when conducting council business. So the ‘basic allowance’ simultaneously compensated the councillor for their time (and that is not an ‘expense’ which can be disregarded - it is payment for doing the job) and for necessary expenses. There could be instances where the necessary expenses actually incurred by the councillor either matched or exceeded the amount of the basic allowance - and in CIS/77/1993 (https://www.rightsnet.org.uk/pdfs/cis/77_93b.pdf) the Commissioner decided that where the councillor could actually demonstrate that to be the case, the basic allowance should be disregarded as a necessary expense.

4. What that means for your client is that;

a) it is possible for some or all of the basic allowance to be disregarded - but only so much as the client can evidence that she actually spent out of her own pocket on council business (home internet, personal phone etc)

b) the whole of the attendance allowance is earnings - if that exceeds the permitted work earnings threshold, she’s stuffed.

thanks PC, very helpful, my cl gets about £13.000 allowances so I think she is going to struggle even if a bit could be counted as work costs, and getting UC to accept that might not be easy, she will claim UC and see what it throws up, along with a big ESA overpayment looming I suspect she will wish she had remained out of politics

Just to try to dot some more “i"s on councillors’ allowances and IRESA. First, though payments (including a part of a payment: reg.2(1)) reimbursing necessary etc expenses are declared not to be earnings (reg.95(2)(c)), they are also declared to be income other than earnings (reg.104(8)(a)), but immediately disregarded as such (Sch.8, para.3).

Second, there is quite a lot of guidance in DMG 49081 - 49107 (see ADM H3038 onwards for the more or less identical points on UC), which sets out the sorts of allowance that can be payable under 2003 Regulations in England. It is accepted that the basic allowance (the separate attendance allowance seems to have gone) covers both the time spent by a councillor on their duties and expenses involved not covered by other payments (e.g. travel and subsistence allowance), and that what can be identifed as the necessary expenses element should not be treated as earnings [or income other than earnings]. That might include use of the home (proportion of heating, lighting etc) as well as a proportion of telephone/internet expenses. The guidance even accepts that expenses necessarily incurred that are not covered by the basic allowance should be deducted from the amount to be taken into account.

Third, what is left of earnings after that process is subject to a £20 per week disregard under para.7(2) of Sch.7 because the claimant’s work comes under reg.40(2)(a). It is very difficult to work out how that provision fits in with other paras of Sch.7 allowing a higher disregard, but they could only possibly apply if the person works for less than 16 hours a week and earnings do not exceed 16 times national minimum hourly wage and no doubt the DWP would say that they are trumped in the case of councillors by the specific rule in para.7(2).

However, in the light of the level of the basic allowance paid, the earnings to be taken into account may well still exceed the applicable amount, so knock out IRESA entitlement.

JM thanks for that, we have asked for an MR to make sur ethe figures etc are correct, she eared a lot less for the start of teh period, its only when she got a promotion and went from c£5000 to c£13000 that I think she went over the limit, however she seems not to have informed ESA when her pay went up so overpaid I expect, \i did see a Comms decision what said it was not in dispute councilors allowance was income to ne taken into account, the ref was in CPAG, it was a similar case to mine and teh dwp had taken all income including travel ect into account , the Comms found in favour of teh claimant and removed teh travel etc but still left the basic allowance as income to reduce her income support or what ever benefit it was at the time,  CIS/77/93 - Earnings - Employed Earners - Local Authority ...