ESA and works pensions

Is ESA affected if someone chooses to take a lump sum in lieu of a monthly works pension? My client is terminally ill and there is no point taking a regular pension.

Thank you.

S3(3) of the Welfare Reform Act 2007 defines “pension payment” as

(a) a periodical payment made in relation to a person under apersonal pension scheme or, in connection with the coming toan end of an employment of his, under an occupational pensionscheme or a public service pension scheme,
(b) a payment of a prescribed description made under an insurancepolicy providing benefits in connection with physical or mental illness or disability, and
(c) such other payments as may be prescribed;

Lump sum payment s are not ” pension payments ” for the purposes of CESA so wont be taken into account

Although this may be different if they are claiming income-related ESA of course.

Thanks both. It’s not income-based so this will make her options clearer.

Just had a client undergo an interview with a compliance officer in relation to contributions ESA and her occupational pension.
I told her prior to interview which was causing her distress that she need not worry as gross occupational pension was under £85.

Was told at the interview that yes her weekly payments will not affect her ESA but they are going to check if her lump sum would????

Any way it could? Deliberately getting her weekly pension reduced (by taking a lump sum) so as no deduction in ESA?

CMILKCAB - 14 March 2023 11:11 AM

Just had a client undergo an interview with a compliance officer in relation to contributions ESA and her occupational pension.
I told her prior to interview which was causing her distress that she need not worry as gross occupational pension was under £85.

Was told at the interview that yes her weekly payments will not affect her ESA but they are going to check if her lump sum would????

Any way it could? Deliberately getting her weekly pension reduced (by taking a lump sum) so as no deduction in ESA?

Also just had a client who is taking her pension earlier. Conts-based ESA but pension will certainly exceed the £85 threshold, leaving her with reduced ESA.  However, they are insisting that they need to see the bank statement and the lump sum.  Clt and ptr not on any means-tested benefits!!

Elaine