Exactly how does ESA get reduced due to my Private Pension

luminated

Hi Folks

I really can't find the answer on searches!!

I am 63 have a private pension of £126 per week, my wife has a state pension just over £100 per week, my savings a bit over the £16,000 and I am claiming Contribution based ESA. But what affect will my pension have on the amount of ESA possible/payable?

I am absolutely shattered due to the extra stress of all the telephone calls at the end of last week and preparing myself for the medical form when it arrives. GP, CAB, ESA telephone claim, NI office, etc.

If any potential payment is fully cancelled out I may be putting myself through the mill for no good reason so it would be good if anyone can help with this question.

Oldernotwiser

Private pensions over £85 are taken into account with CB ESA but not on a pound for pound basis, so it should still be worth your while applying.

I'm sure someone will be along who knows the exact formula for calculating this but I don't want to give you incorrect information.

seven-day-weekend

CB ESA is reduced by 50p in the £1 for every £ after £85 so for your pension of £126 per week you would lose around £20.50 a week. State Pensions (your wife's) do not affect it.

luminated

Thank you so much Oldernotwiser & seven-day-weekend

In the last 20 minutes I have been searching and came across this on the directgov site as per the link given. It seems like everything is on the WEB BUT finding it is another matter.

Again thanks for your time and help.



Pension income rules

If you receive contribution-based Employment and Support Allowance and have a gross pension income of more than £85 a week, the amount of benefit payable will be reduced by half of the excess.
The excess is the difference between £85 and the actual pension income. For example, for a pension income of £100, the excess is £15. The amount of Employment and Support Allowance payable is reduced by half of that, which is £7.50.
If you receive income-related Employment and Support Allowance, any pension income you have will be taken into account, regardless of the amount.

http://www.direct.gov.uk/en/DisabledPeople/FinancialSupport/esa/DG_171896

Couponcollector

Help!! I am in support ESA group and just found out private pension I'll health application successful.Is there a " cut off " point in the pension payments that means no ESA gets paid at all, or do I just work out what I would get over£85.00 and reduce by half, then deduct this from the current rate of £99.00. ??
Eg if a pension was £250 per week would there be no ESA or would it be esapayment of approx £16.00..?
( I don't know how much my pension will be yet as I haven't filled in all the online forms!)
Also, is contributory ESA going to be abolished after a year?


Thanks

Cpt.Scarlet

If the pension deduction exceeds your ESA payments then you will lose entitlement, so if you are currently receiving £99/w for ESA, then (2 x 99) + 85 = 283 in pension will result in you losing ESA.

Couponcollector

Thank you so much for that! I have looked everywhere on Internet to try to find this out. I am really grateful to you!

HB58

In answer to your other question - the proposal is that contributory ESA will be stopped after 365 days in the WRAG. Time spent in the support group will not be counted.

Cpt.Scarlet

Cpt.Scarlet wrote: »

If the pension deduction exceeds your ESA payments then you will lose entitlement, so if you are currently receiving £99/w for ESA, then (2 x 99) + 85 = 283 in pension will result in you losing ESA.

Just to clarify, providing you remain eligible for ESA (e.g. complete ESA50, attend medical if required), you can continue to receive NI Credits towards your State Pension, even if you receive no payments due to your pension.

bellkat

I am claiming ESA, I'm 55 and in the WRAG group. I receive a small pension of £110 a month. All of this is deducted from my ESA.

After reading this thread I'm a little confused, is this correct?

Thanks for any advice

Chorlie

bellkat wrote: »

I am claiming ESA, I'm 55 and in the WRAG group. I receive a small pension of £110 a month. All of this is deducted from my ESA.

After reading this thread I'm a little confused, is this correct?

Thanks for any advice

If you're on Contribution Based ESA they reduce your ESA by 50p for every £1 over £85 of your Gross Pension, but if you're on Income Based ESA then it's the whole of your Gross Pension and not just amounts over £85 (what's not clear is if it's also at a rate of 50p in the £1 or not).



From the Direct Gov Web Site:

Pension income rules:

If you receive contribution-based Employment and Support Allowance and have a gross pension income of more than £85 a week, the amount of benefit payable will be reduced by half of the excess.

The excess is the difference between £85 and the actual pension income. For example, for a pension income of £100, the excess is £15. The amount of Employment and Support Allowance payable is reduced by half of that, which is £7.50.

If you receive income-related Employment and Support Allowance, any pension income you have will be taken into account, regardless of the amount.



Income Tax:

Income-related Employment and Support Allowance is not taxable.
It's important to note that contribution-based Employment and Support Allowance is taxable, so you may have to pay tax. How much tax, if any, you have to pay depends on whether you receive any other income, for example, an occupational pension.

Depending on your circumstances, you may get a new tax code.