Breaking CESA with WRAC claim to get another 12 months CESA

To be honest, even after all these years, I still struggle to understand NI contribution conditions for benefits…

If people break their CESA claim for 12 weeks, they may qualify for another 12 months CESA by using another tax year’s NI contributions. There is an explanation of this on page 182 CPAG Handbook but I’m trying to work out the practical application of this.

1) If someone had exhausted their CESA entitlement now, which tax years would they need to rely on for another 12 months CESA if they broke their claim?
2) Is the reference to “weeks”, calendar weeks, benefit-weeks?
3) Has anyone succeeded in getting projection from DWP about whether this is worth doing? (us advisers often don’t know clients’ NI records).

Thanks

If someone is making a claim for CBESA now (benefit year 2012) the relevant tax years are the two immediately preceding January 2012: that is, April 2009-April 2010 and April 2010-April 2011. If they can fulfill the contribution conditions using those two years - which would require them to have been working for a significant period during one of the tax years, and earning at no less than the lower earnings limit for that year, for a minimum of 26 weeks. The conditions for the other year can be satisfied by credits, including incapacity credits. The claim must not of course link back to a claim based on different years.
I think I’m right in saying that you only need to use one year that you didn’t use the first time round, not both; so if the previous claim was a year ago on the basis of 2008/9 and 2009/2010, that’s OK. If the claim was made two years ago (2010) so you were using 2007/8 and 2008/9, you might have difficulty meeting the “paid contributions” condition, depending when in 2010 your claim started.

Thanks for this - very helpful.  In reality, we are often unlikely to have enough details about a client’s NI record.

Our BDC is able to reveal my clients’ earnings factors for the tax years concerned.  They have the figures on computer.  Although I think HMRC actually provides the figures.  There’s an interface between the two I think.  I’m using that argument to defend an overpayment of carer’s allowance (eg, the CA Unit would have known at the end of each tax year that client was earning over CA earnings threshold because it would have had to know her earnings factor in order to know whether to award carers’ credits for that year).

Ariadne covers the test very well in her summay.  I’d just add that whilst 26 weeks’ earnings of at least the LEL are the minimum for the first contribution condition, the person would still need to satisfy the 2nd contribution condition for that same tax year.  Eg, person works for 40 weeks in 2010/11 earning £102 p/w which, for ease, is the rate of the 2010/11 LEL.  His earnings factor for 1st contribution condition is £4080 (ie 40 x 102).  It needed to be at least £2652 (ie 26 x 102) in order to count. £4080 >£2652 so he’s ok.  However, he’d still need to satisfy the 2nd contribution condition for 2010/11 which would require a minimum earnings factor through a combination of earnings and credits of £5100 (ie, 50 x 102).      £4080 < £5100 so his earnings alone are not enough to make 2010/11 count for the 2nd contribution condition.  He’d have to top his earnings factor up with credits (one week’s credit = £102).  He’d need 10 weeks’ credits to make the year count.

The above is only a problem where the person earns a low wage.  If, for example, he’d earned £130 p/w above, whilst his earnings factor for the 1st condition would remain £4080 (because for ESA/JSA his earnings are capped at £102 p/w, the LEL), his earnings factor for the 2nd condition would be £5200 (ie 40 x 130). Earnings are only capped to the LEL for the 1st not the 2nd condition.  The 2nd condition does have a cap on earnings, but it’s set at the Upper Earnings Limit, ie £844 p/w for 2010/11.  £5200 > £5100 so year 2010/11 would count for the 2nd condition without his having to seek a top up from credits.

Periods of limited capability for work (pLCW) must be separated by “more than” 12 weeks in order not to link, - see Reg 145(1).  So 12 weeks and a day would seem to do.  Week is defined by section 24(1) WRA 2007 as a period of 7 days commencing with a Sunday or another period of 7 days that may be prescribed.  Reg 2(1) ESA Regs prescribes “week” for this purpose simply as “a period of 7 days”.  So the ESA Regs definition trumps the WRA definition.  Reg 2(1) does not define “day” but it does define “working day” so by implication 7 days must be ordinary calendar days including Saturday, Sunday and all Bank Holidays.

Consequently, I interpret 12 weeks in Reg 145(1) as simply 84 calendar days.  So “more than” 12 weeks will be 85 days between the last day of the old pLCW and the first day of the new pLCW, both days exclusive (Reg 145(1) refers to the pLCWs being “separated”). 

The last day of a claimant’s old pLCW would seem to be the last day of his old ESA award.  The first day of the new pLCW is whatever date the claimant wants his new claim to be made from (max backdate of course is 3 months).  The clerical ESA1 form asks for this date on page 1 (“the ESA1 date”).  The contact centre should request this date also.  As we know, the 1st three days from and including the ESA1 date will be waiting days, unpaid. 

If in doubt, I’d advise any client to expressly ask for the new award to commence “no later than is necessary in order to successfully break the respective pLCWs in accordance with ESA Regs”.

Of those left without even ESA-ir following CESA time limiting, the department should surely know the ones who would re-qualify for CESA if they re-claimed.  Those people are, after all, still deemed to have LCW and sent for medicals. Shouldn’t it be writing to them inviting a new claim? It was kind enough to give advance notice of their benefit ending.

The new award would end in August.  If he then waited 85 days and re-claimed, whether that re-claim would be successful would depend on his contributions/credits for 2009/10 and 2010/11 as discussed above.  If he was a carer in 2010/11 or can fit into one of the other categories of Reg 8 ESA Regs he could use any tax year in the past to satisfy the 1st contribution condition.  See if your Benefits Centre have his earnings factors for the above 2 tax years.

This may help, in particular paragraph 23

http://www.dwp.gov.uk/docs/m-13-12.pdf