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Forum Home  →  Discussion  →  Covid-19 issues  →  Thread

ESA IR and Capital

CER
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Middlesbrough Welfare Rights Unit

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I have a situation with an individual who is receiving income related ESA, SDP included. They are going to gain inheritance which is going to push their savings over £16,000.
Will they lose their ESA entitlement altogether and then need to claim UC once their savings drop, or can their ESA payments be suspended until their savings drop below £16,000 again, especially as they need to buy a funeral plan etc.

HB Anorak
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Benefits consultant/trainer - hbanorak.co.uk, East London

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Is there an old-style ESA(c) award in place with an income-related top-up?  If so, no problem, you can drift in and out of ESA(ir) from time to time and remain entitled to old-style ESA at all times.

Otherwise:

Depending on the amount of the inheritance, what they reasonably have a pressing need to spend and how quickly, one possibioity is to delay reporting until after the capital dips below the limit, and then say: “oh by the way, my savings just crept over the limit for a week or two back there”, which can be dealt with as a closed period supersession leaving the ongoing award untouched.  But anyone in an adviser role should be extremely cautious about recommending that course of action.  I think there can be circumstances in which that is the most efficient way of dealing with the issue, but there is obviously a risk of deliberately failing to disclose a significant change of crcumstances; and there is also the risk that the spending, however necessary the item might be, will be seen as deliberate deprivation of capital in order to engineer a closed period supersession and thus preserve a far higher rate of benefit.  If that view were taken, the ruse would fail because the DWP would make a nil entitlement decision going forward on the basis of notional capital.

If there is a single week in which ESA(ir) entitlement has ended in “real time” (i.e. situation on the ground is that the claimant today is not on ESA(ir)), that will be curtains and any future new claim would have to be UC - unless ols style ESA(c) remains in place as I said above.

Paul_Treloar_AgeUK
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Information and advice resources - Age UK

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I’m afraid they lose their entitlement to income-related ESA entirely.

Para.6(1)(B) of Sch.1 of the Welfare Reform Act 2007 states:

6(1)The conditions [for entitlement] are that the claimant—

(b)does not have capital which, or a prescribed part of which, exceeds the prescribed amount;

and reg.110 of the ESA Regs 2008 states:

Capital limit
110.  For the purposes of paragraph 6(1)(b) of Schedule 1 to the Act as it applies to an income-related allowance (no entitlement to benefit if capital exceeds prescribed amount), the prescribed amount is £16,000.

As such, there’s no way to argue any kind of underlying entitlement or a suspension of the award, it’s terminated when the capital exceeds £16,000.

Paul_Treloar_AgeUK
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Information and advice resources - Age UK

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Peter’s point on checking the c-ESA status is worth following up mind you.

Gareth Morgan
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CEO, Ferret, Cardiff

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Are there any debts which could be cleared at the same time the inheritance is received?

Ianb
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Macmillan benefits team, Citizens Advice Bristol

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I seem to recall a recent thread where somebody had been on legacy ESA which had stopped but been maintained as a ‘credits only’ claim and, despite the fact that we think no such thing exists and that they should not do this, DWP had subsequently allowed payment to resume. However I can’t find that thread so perhaps I dreamt it.

Dan Manville
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Greater Manchester Law Centre

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Ianb - 09 February 2021 04:48 PM

I seem to recall a recent thread where somebody had been on legacy ESA which had stopped but been maintained as a ‘credits only’ claim and, despite the fact that we think no such thing exists and that they should not do this, DWP had subsequently allowed payment to resume. However I can’t find that thread so perhaps I dreamt it.

Although not recently I have seen that happen.