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Status of IRESA claim when capital exceeds

 

stevemac
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Hi all -very frugal client who has accrued capital from not spending his benefits (IRESA and DLA)  of £30k and his MTB’s have now stopped

He is currently paying his rent and council tax and is likely to be required to repay overpaid HB/CTR and IRESA

I assume his ESA claim will / should continue to exist on basis of credits only so once his savings are £16k or less we can get his payments re-instated (UCFS starts in our area 6/6/18 and do not want him to have to claim this until he has no choice)

many thanks

     
Martin Williams
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He will need to reclaim. He will also have to serve a new assessment period at start of new award. If capital not defrayed by 6/6/18 then he is going to be stuck on UC.

     
From the other side
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I don’t wish to disagree with Martin but would it not be the case that if his ESA (cont based) remains as credits only that will mean he will still have a legacy claim to ESA subject to still passing any WCA. The claim should not end because his capital is over £16000, it would just be his current ESA(IR) entitlement.  Then when his capital reduces below £16000 he should be able to report a change in circs and go back on ESA (IR). The fact that UCFS starts 6/6/18 should not affect him it will be how they deal with Transition from ESA to UC which won’t be happening at that stage! Which going by the terrible way they have managed IB to ESA ......................however it has been accepted that ESA is one claim no matter whether (cont based) or (IR)

Did he originally qualify of ESA (cont based)? If so I take it that he is not in the Support Group and receiving ESA (cont based) but should he be in the Support Group, might be worth checking that out?

The DWP will be very stringent in applying deprivation of capital, they may allow some large purchase items but they will only reduce his weekly capital by the value of ESA (IR), HB & CT. Obviously if he repays any overpayment that should reduce it. I would also be looking at whether they are disregarding any of the benefits recently paid.  They do not like to see frivolous spending!!

     
HB Anorak
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Unfortunately I don’t think that ESA survives “credits only” periods.  The significance of “credits only” is that DWP recognises the person still has LCW, which then has spin-off effects in HB etc.  But to be entitled to ESA a person needs to satisfy section 1(2) of the WRA 2007 (contribution based or income based conditions), which is subject to s1A (time limit on contribution based entitlement).  I think the effect of all that is that a person who has LCW but neither conts based nor income based ESA is not entitled to ESA and has no underlying latent award of ESA.  They might become entitled to conts based ESA again in the future if they continue to have LCW and move into the support group: that is written into s1A.  But there does not seem to me to be any way that an award of ESA(ir) could be resurrected following a “credits only” phase without making a new claim ... and in full service, a new claim would instantly abolish ESA(ir).

     
From the other side
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The ESA claim is still “live” as they are being awarded NI credits. It is still on the ESA system. They will still get annual uprating letters so I would think it does survive. If the claim didn’t survive they wouldn’t send for further WCA or request attendance at Work Focussed Interviews. The award of a NI credit is an entitlement from the ESA claim.

I recently had a client who after migration from IB had received a years ESA (c) as they had been placed in WRAG. Was also receiving ESA(IR) during this period but then had a divorce settlement and capital took her off ESA (IR). 1 year later client requested ESA(IR) as savings below capital limit but DWP deemed notional capital so no entitlement. She had not made a new claim to ESA, taken as change in circs to look at capital issue. As an aside client then had a new WCA after refusal of ESA (IR) and was placed in SG, ESA(cont) was put back into payment eventually after a bit of a fight by highlighting continuous claim.

I do not see how it can be said that the claim survives for (cont based) but not (IR). It is one benefit.

     
Pete at CAB
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I can’t see how an increase in capital could terminate an award, surely an award can only be terminated if the claimant is assessed or treated as no longer having LCW. Capital is just a question of entitlement to payment, not a LCW decision and I always thought that Credits only would continue- it would seem to me to be analogous to the situation where a claimant’s partner is working, the claimant still get credits only.

     
stevemac
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many thanks for these replies - I am hoping that client still has an ESA claim running (he was /is only eligible for IRESA)  albeit as a credits only type which we can review as his savings reduce thus avoiding UC

     
Jon (CHDCA)
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Some discussion on “credits-only claims” in this old thread:
https://www.rightsnet.org.uk/forums/viewthread/5350

Even if this claimant did manage to reactivate his ESA award (by sending in an ESA3 or something, and hoping DWP ignore the fact that the award had previously ended), he’s not going to get his HB back, so will presumably need to rely on UC fairly soon to cover the rent in any case?

     
Sally63
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I had a client like this today. His ESA stopped in 2016 because his capital was too high but he kept receiving ESA letters explaining why it was not being paid. By now the capital is within eligibility limits and the latest letter says that if his capital is no longer over £16,000 he should inform them before appealing ie ask for an MR.

so the DWp is treating the claim as live just not having been paid—credits only although I haven’t checked this. We should be able to re-start his ESA but as Jon says his HB also stopped and to re-activate housing costs payments he will have to claim UC (we are FS).

But his ESA certainly seems to have remained alive in some form or other—just waiting for him to report a change of circs which means he is eligible again.

     
Elliot Kent
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The thing with “dormant” or “credits-only claims” is that legally they should not not exist but in DWP-land they do.

Usually this works to the claimants advantage (I’ve certainly seen first-hand ESA being “re-instated” in full service areas on receipt of an ESA3) so it doesn’t get challenged.

     
Helen Rogers
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“Dormant” is completely different to “credits only.”  Dormant means that the claim has been closed completely and no credits are being paid.

     
From the other side
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Looking at the discussion in the other quoted thread I understand how the regs have been written but I do not believe that the correct interpretation is as others have given, that money must be in payment for a claim to exist. If that was the intention of the regs then it would not be possible for someone to exhaust ESA (cont) whilst in WRAG but then be able to be paid again if successful at a later WCA and placed in SG.

Even on Incapacity Benefit there were credits only claims, same also applies to JSA, the claim is still there even though “cont” based has exhausted and no entitlement to income based.

There are several automatic ways that an ESA claim can be closed without the claimant advising that they no longer wish to claim(for whatever reason) but just because they receive no money is not one of them.

However for the current client I do accept that even if ESA (IB) could be put back into payment because the client needs to claim Housing Costs there is no current HB claim and the only way that he can claim for them is on UC so ultimately we are discussing a moot point!! Potentially different if client owned his own home.

     
Martin Williams
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Doubling down on HB Anorak’s point…

The issue in this thread is:

IF

1. someone ceases to be entitled to irESA but still has limited capability for work (what is sometimes misleadingly called a “credits only claim” for ESA)

THEN

2. does this “credits only claim” mean they are able to start getting irESA in a full service area without the need for a new claim (as presumably everyone accepts you can’t make a new claim for irESA in a full service area).

——————-
First on “credits only claim”:

1. calling something a “claim” when there is an award in place is misleading - sorry it is a pedant point but I really think it worth while getting used to the idea that a claim ceases to exist once decided leaving only an award in place. Doing that helps to encourage the idea that benefits are run under a decision based system.

2. secondly, the fact that someone is being credited with NI due to the fact that they have limited capability for work does not mean that they have any form of ESA- this is simply not an award or claim for ESA.

Taking this second point:

1. ESA is provided for by the WRA 2007. S.1 provides for its existence when someone satisfies the basic conditions in s.1(3) and also either the income related or the contribution based conditions.

2. There is no other form of ESA.

3. What there is, is the ability to be credited with contributions for weeks of limited capability for work (provided for in reg 8B of the Social Security (Credits) Regulations 1975 (SI No. 556). Importantly these are not some form of ESA- they are what they say they are on the tin, credits for having LCW.

4. This client does not meet the income related conditions (sch. 1, para 6(1)(b)- has capital over a prescribed amount amd therefore ceased to be entitled to an award of ESA on basis of the income related route). They had no entitlement to an award of ESA via the contribution related route. If you don’t meet either the income related or the contribution related route then you cease to be entitled to ESA.

5. The fact you continue getting credits to the extent needed to meet various contribution conditions (See reg 3 of Credits Regs) does not mean you have something called a “credits only award of ESA” or “credits only claim for ESA” despite that being a popular phrase and also despite the fact that DWP computers may be programmed to think like that (causing problems when one tries to claim something else or indeed meaning DWP officials sometimes allow people, wrongly, to go back on ESA in these circumstances).

Sorry to be so emphatic on this but it is clear in the statutes and regulations.

Martin

      [ Edited: 18 Apr 2018 at 10:58 am by Martin Williams ]
Martin Williams
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And dealing with this:

From the other side - 18 April 2018 10:33 AM

Looking at the discussion in the other quoted thread I understand how the regs have been written but I do not believe that the correct interpretation is as others have given, that money must be in payment for a claim to exist. If that was the intention of the regs then it would not be possible for someone to exhaust ESA (cont) whilst in WRAG but then be able to be paid again if successful at a later WCA and placed in SG.

Even on Incapacity Benefit there were credits only claims, same also applies to JSA, the claim is still there even though “cont” based has exhausted and no entitlement to income based.

There are several automatic ways that an ESA claim can be closed without the claimant advising that they no longer wish to claim(for whatever reason) but just because they receive no money is not one of them.

However for the current client I do accept that even if ESA (IB) could be put back into payment because the client needs to claim Housing Costs there is no current HB claim and the only way that he can claim for them is on UC so ultimately we are discussing a moot point!! Potentially different if client owned his own home.

On the point about someone requalifying for cESA after exhausting the 365 days if subsequently placed in support group) works because specific provision is made for it- s.1B of the WRA 2007.

On the point that “receiving no money” is not closing an ESA award- I agree. If a decision is made that someone is not entitled to ESA because they don’t meet the conditions of entitlement (for example that income exceeds applicable amount or capital exceeds threshold) then that is what ends the award- the result of that decision is they get no money but its cause is elsewhere.