ESA Deducted from Part Time Salary

Uncertain · 2 March 2009 at 10:23PM

Can anybody advise about this please?

Having been off sick for about 8 months I am currently receiving the flat rate of ESA (£60.50 pw). I work part time for an employer and my sick pay has now reduced to half salary. They are deducting the whole ESA amount from the half salary which has the knock on effect of reducing their contribution to my pension.

In theory I work self employed / freelance for the remainder of the time but have not done so for about 10 months due to being ill.

Why is the whole of the ESA being deducted from my part time salary? Should it not be only a proportionate amount?

Or, can I opt for the ESA to be applied to my self employed activites so that I do not lose pension benefit?

Uncertain · 5 March 2009 at 4:08PM

I've bumped this in the hope that somebody may know the answer.

My employer's payroll managed doesn't know.

My professional association's legal service don't know.

And I don't know!!

I currently pay self employed NI contributions in addition to those taken from my part time salary

cabbage · 5 March 2009 at 6:37PM

Sorry I'm a bit confused. You are on Statutory Sick Pay (SSP)and this was boosted by Contractural sick pay (a top up from your employer). As far as I know, ESA is paid to you in the bank via DWP its not included in your salary so shouldn't affect any pension contributions. SSP and Contractural sick pay are paid by your employer.

You cannot claim ESA and Statutory Sick pay together. ESA is the benefit you may be able to go onto when SSP ends after 28 weeks - it replaced incapacity benefit. So if you are getting ESA and SSP at the same time then a mistake has been made and you may have an overpayment of ESA to pay back.

When you get ESA its not classed as earnings by your employer so he won't contribute his bit towards your pension. As its not being paid through your work and its not earnings, pension contributions are not paid when on ESA but you will get NI credits towards your state retirement pension.

The first 13 weeks of ESA are paid at a flat rate - in your case £60.50. After this you are placed into one of two groups, a work related activity group and get an extra £24 per week or the support group which gives you an extra £29. At this time too, if you are entitled to extra ESA in the form of premiums they are added too eg, housing costs, pensioner premiums etc.

I hope this clarifies things. If you're not sure, try to get to see your local cab or your local councils Welfare Rights service.

good luck

cabbage · 5 March 2009 at 6:40PM

Sorry forgot to say - there are two types of ESA, income related and contribution based. The latter is based on NI contributions usually over last three tax years.

If you are on income based ESA then any income is counted so any earnings will reduce the amount of ESA you receive.

Uncertain · 5 March 2009 at 7:03PM

Thanks for your replies Cabbage. Probably I didn't make things clear enough in my first post.

For the first 6 months I was off sick I was paid in full by my part time employer. No doubt this included SSP which they claimed back from the gov.

During this time I did no freelance work but continued to pay my self employed NI in addition to that taken out of my salary by my part time employer.

After 6 months I dropped to half pay and was told to claim IB. This no longer existed for new claims so I claimed ESA. This I am currently getting at 60.50 per week paid direct to my bank.

However, my employers are now deducting this amount from my half pay. I am still doing no freelance work so my self employed earnings are zero.

My question is why should the full ESA be deducted from my part time salary, leaving none to help with my lack of self employed earnings?

sammyjammy · 5 March 2009 at 7:57PM

If you're on half pay from your employer I don't think you should be getting ESA at all.........................

suelees1 · 5 March 2009 at 8:08PM

You're right about the ssp - that your employer tops this up to whatever they've agreed to pay you whilst you're off sick. They're doing the same thing with your ESA. Employers don't have to pay you at all. It all depends on the terms and conditions of employment.