Permanent health insurance

Does anyone know if PHI payments still reduce contributory ESA payments if the employee is still employed?

I have seen Reg 72 which says PHI payments are to be regarded as pensions for deduction purposes but only if arranged by an employer on termination of employment. My client is still technically employed (as is the case with PHI schemes) and receiving a percentage of his salary via the payments. I don’t think they have contributed to the premiums which would also mean Reg 75 wouldn’t apply.

They have now been contacted by the fraud department and told their ESA payments are to be stopped next week. (client receives both income based and contributory ESA and is in the SG). Apparently the PHI payments seem to have caused them to believe he has been overpaid despite the fact he disclosed them when making his claim for the benefit and provided further information when requested.

Thanks

Reg 75 applies.  If I understand your post correctly, your client has paid the full amount of the premiums (ie more than 50%) and therefore the PHI payments should be disregarded for the purposes of contributory based ESA.

Sorry I didn’t word that very clearly. The client has not contributed to the scheme.

It is all arranged by the employer.

I am just not sure of the position where the individual is still employed as the regulation refers to “termination of employment”

https://www.rightsnet.org.uk/forums/viewthread/10786/

That is a previous thread with a similar case where ESA reversed their decison. The definition of PHI being post-termination of employment is pretty clear.

That’s a really useful thread, thanks.

Alex89 - 16 June 2017 11:56 AM

.. client receives both income based and contributory ESA

Just to be clear, the income-related ESA may be overpaid, there’s no general disregard for sick pay on that. Recoverability depends on the usual misrepresentation/failure to disclose issues.