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Forum Home  →  Discussion  →  Benefits for older people  →  Thread

Withdrawing ESA while on PC

Jon (CANY)
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Welfare benefits - Craven CAB, North Yorkshire

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Single man being transitioned from IB to ESA, already on PC top-up, might not qualify for ESA, and would find the procedure stressful. No anticipated life changes before SRP age. Seems to us that he could just withdraw his sickness benefit claim and rely on pure PC. Is there a significant risk of PC deciding he has deprived himself of income?

Jon (CANY)
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Welfare benefits - Craven CAB, North Yorkshire

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Sorry, to clarify: he has a conversion letter. Poor literacy, remote location, mean completing an ESA50 and attending a medical would be difficult. Can he avoid those steps and simply withdraw?

Matthew Finch
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Senior Welfare Rights Officer, Leicester City Council

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“Wihdrawing” could be problematic as your client wouldn’t want to be seen as deliberately getting rid of income in order to increase Pension Credit entitlement, the Pension Service could treat this as deprivation of Income. ( Reg 18 (6) SPC Regs).  However if they failed the ESA test then there would be no problem.

Jon (CANY)
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Welfare benefits - Craven CAB, North Yorkshire

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My question was: if he decides not to go through a WCA, can anyone quantify just how “problematic” might it be. Is it just a hypothetical risk, or is it a likely decision that the pension service could make? Has anyone had a client in a similar situation? (I don’t think the cases where people withdraw CA is really equivalent, because the effect can be on someone else’s benefit rather than on your own). On the one hand, he is not increasing his overall benefit entitlement, and he is not withdrawing the claim with the intention of securing or increasing overall entitlement. On the other hand, he has given up a source of income, assuming the Pension Service will make it back up again.

dbcwru
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Darlington Welfare Rights, Darlington Borough Council

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Ive had a similar case and wrote to the GP asking for support for client not to have a medical examination (WCA) and sent this with the completed ESA50. They just passed him on scrutiny bearing in mind his age and the medical evidence submitted-next WCA after pension age-so sorted.

Oldestrocker
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Principal - Forensic Accountants, Canterbury

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Again I had a similar situation.
Couple. He was in receipt of ESA (cont) + private pension + DLA/CA (underlying entitlement) + DLA (wife)

His annual tax liability was approx £1000.00 on that income.

He became eligible due to age to claim GPC. Calculations showed that they would increase their income by some £2000pa on GCP and there would be no tax liability. A total net increase in spendable income of £3000pa.

We closed down the ESA (Cont) claim and claimed GPC. Pension Service initially used the deprivation rules, but it was pointed out that the intention was soley to reduce their tax liability.

The Pension Service continued with their argument, until client obtained a ‘certificate’ from his GP which stated he was fit for work. The DWP was asked to close the ESA award down in light of this evidence, which resulted in the ‘disgruntled’ Pension Service having to award full GPC!!

I spoke to them after that award and it was fairly clear that they knew what we had done, but could not prove it - as long as the client does not inform them!!

There are ways and means!

Oldestrocker
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Principal - Forensic Accountants, Canterbury

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Sorry, yes the reason behind the change was to mitigate the tax liability.
Obviously with that came the increase from GPC, but that wasn’t the reason. I got involved primarily because of the tax position.

My last comments were only meant as a little bit of ‘off beat humour’.

It was a comment I made to my client only because of their comments that as soon as I mentioned that they would also get an increase in income as well as a reduced tax bill, they jumped at it!!

The Pension Service intimated that they knew what had happened (which wasn’t the case) but couldn’t prove it.

[ Edited: 16 Feb 2012 at 03:49 pm by Oldestrocker ]
Matthew Finch
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Senior Welfare Rights Officer, Leicester City Council

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A cynic (i.e. Welfare Rights Officer!) might say that there’a a good chance that the client in question will simply fail the LCWA because that’s what happens to lot’s of very ill people after their ATOS medical examination! In which case you’ve not deprived yourself of anything by being failed by the medical examiner and Pension Credit willbe payable.