ESA question re' means testing

anonimouse1_2

Hi everyone, I'm new here and not used to this but need some answers or advice as no one I have asked at the DWP have answerd me so far, I will do my best to keep it short and thank you in advance.

I took early retirement about 6 years ago due to ill health, I have a small private pension and wife is on "Long term" Incapcity benefit we moved to our little house in Spain for cheaper living all based on our income at that time. Sold UK house.

Government changes to the Gad rules cut my pension by a few thousand and along with exchange rate I lost even more.DWP have now decided wife must go onto ESA and have put her into the wrag which she is appealing against and they are going to stop her payments next year.

My pension will no way support us on it's own and if she has no income and has to re apply for the new benefit she/we will be means tested They suggested she claimed a benefit from this country (Spain), as if.

Because we own property abroad, although it's worth not much more than the 16k allowance, I fear she will not qualifyand of course this house will still have some running costs even empty. I would like to know, and have asked DWP to no avail, if we were to sell our property and put the money into my pension fund to top it back up, would they "NOT" take this as capital (the web page tells me they don't look at pension fund pots) also I wonder if I were to freeze my pension instead of drawing from it would they consider this as income or not look at it,when assessing her means tested claim.

Also because we are in Spain living in our only home (that would have been permanent if not for the governents changes), on our return to the UK we would be homeless, If we spend the little money we have on accomodation in the UK on say a caravan to live in, we would then be skint but a caravan would be far cheaper than renting a house.Would they look at the Spanish home as a second home instead of our only home? I have seen there are special rules if you can show you are trying to sell this home, but no one I have spoken to at the DWP can tell me exactly how they work this all out, they say make a claim and wait for a decision maker to decide. If they decided to pay us, what will happen when the property sold? It's not valued at much probably about 50k..

Hope someone has answers I have scoured the internet but found nothing yet I am sure there must be many in this situation, I have been legally in Spain so UK know where we are. we need to be honest.

BigAunty

Can't answer your specific questions but do google to see if the 'habitual residency' test for benefits will apply to you.

Benefit claimants found to have intentionally given or transferred their capital (deprivation of capital) in order to qualify for means tested benefits can be treated as if they still have it (notional capital). I'm not sure that this applies to payments made to pensions, as it tends to apply to claimants gifting their land, property and cash to others, but do take expert advice. Google the terms I've used and see if you can find the DWP Decision makers guide for DoC which are the staff manuals they use when reviewing evidence.

anonimouse1_2

Thank you very much for some tips

von

How old are you and your wife?

enabledebra

A maximum 1 year of non means tested (AKA contribution based ) ESA is available. After this period ESA is means tested and this Income related ESA can’t be paid in you aren’t living in the UK (ie it can’t be ‘exported’ abroad like Contribution based ESA or Incapacity benefit can).

If you stay in Spain see here for info of what is available through their benefits system http://ukinspain.fco.gov.uk/en/help-for-british-nationals/living-in-spain/pensions-benefits/benefits/

If you return to the UK, in order for Income Related ESA to be paid there’s the Habitual Residency Test and the means test to pass. If your pension/capital is not enough for the household to live on according to the means test then some Income related ESA would be paid. See the ESA links below for how they take pension income into account, how the value capital held in property is calculated, and for when capital can be disregarded.

When looking at the option of freezing income from your pension or putting your capital into a pension pot see the rules below regarding deprivation of income and capital. If you are deemed to have deprived yourself of income or capital they will continue to take it into account as if you hadn’t taken these steps.

In order to decide if you will buy or rent in the UK you need to know if you would be able to get Housing Benefit to help with rent. Your income and capital are taken into account in a very similar way as it is by income related ESA and the Habitual Residency Test also applies to HB.

If your household is entitled to any amount of income related ESA you would get the maximum amount of Housing benefit available for your household. See here for the maximum rate for a one bedroomed property which depends on where you will live- https://lha-direct.voa.gov.uk/search.aspx

If you don’t get IR ESA then Housing Benefit will do a means test to see if you qualify. You can ask them to do this before you sign a tenancy so that you know what you would have available to meet rent (a “pre tenancy determination”)

Once either of you reaches pensionable age http://pensions-service.direct.gov.uk/en/state-pension-age-calculator/home.asp different rules and entitlements apply

ESA capital rules here http://www.dwp.gov.uk/docs/dmgch52.pdf including how they calculate capital from property, when capital is disregarded and the deprivation of capital rules.

ESA income rules here

http://www.dwp.gov.uk/docs/dmgch51.pdf including how they take pension income into account and deprivation of income/notional income rules.

Habitual residence test rules here:

http://www.dwp.gov.uk/docs/dmgch0703.pdf

von

A maximum 1 year of non means tested (AKA contribution based ) ESA is only available if the OP has paid the relevant NI Contributions in the relevant 2009/10 and 10/11 tax years.

seven-day-weekend

Hi there, I think I have spoken to you on britishexpats (under another name), I too am now back in the UK.

I have little to add as you have been given excellent advice, except to say that unfortunately I think your Spanish house will be treated as capital after a certain time (I think there is about six month's leeway whilst you try to sell it).

Are you sure you won't be able to sell it? We sold ours. Just market it 'differently' (we didn't use an agent and put adverts in bars and other places where our target market would visit) and were prepared to take a big hit on the asking price. We sold it for 103.000 euros from an asking price of 126.000 euros and sold it fully furnished.

I wish you well and welcome back to the good old UK.

(Edited to add: I see your home is valued at 50k, I think people will buy at that price).

rogerblack

The six month period of disregard can increase if it is reasonable.

Boots888

I'm a bit cross about these new changes to cont. based IB-ESA, specifically as its retrospective rules mean that my decision to move abroad based on my income is now defunct. I gave a lot of thought about my future when making this massive decision and had got the OK from the DWP that as I was on Cont based IB, my moving abroad would not affect it. Now I'm trying to settle down and have invested in a property (that I knew would lose value but was cheaper than renting, certainly in the UK)as such was my best option.

Well, now that my income is in jeopardy as next WCA test will not only decide am I unfit for work, but should I need to sell up and move back to .......Hull, probably

I think there are many that made the difficult decision to move abroad and are now uncertain about their future as they rely on certain benefits. If they took away Pensions for those living abroad, there would be chaos of those needing to return to the UK in order to keep that much needed income.

It's tricky, I feel the need to see Ian Dunken Smyth in some rap video apoligising to me for backtracking and putting me out!! (again!)

princessdon

Sorry if this offends anyone (and I am looking subjectively not objectively) but those that live overseas should not be entitled to benefits. Yes that includes pensions and winter fuel too.

If you have decided to give your money to another countries economy then I don't see why you should expect UK tax payers to pay this. Like all things it should perhaps not be implement retrospectively as people made decisions based on information available to them at that point in time, but from this point I think new claims for overseas should be disallowed.

BigAunty

Boots888 wrote: »

I'm a bit cross about these new changes to cont. based IB-ESA, specifically as its retrospective rules mean that my decision to move abroad based on my income is now defunct. I gave a lot of thought about my future when making this massive decision and had got the OK from the DWP that as I was on Cont based IB, my moving abroad would not affect it. Now I'm trying to settle down and have invested in a property (that I knew would lose value but was cheaper than renting, certainly in the UK)as such was my best option.

Well, now that my income is in jeopardy as next WCA test will not only decide am I unfit for work, but should I need to sell up and move back to .......Hull, probably

Benefits change all the time - currently there are 50 plus different types of benefits and allowances, few that remain static.

Many benefits aren't payable or are payable at a reduced rate overseas (including state pensions in certain countries for someone who may have worked for decades)

Your issue, a potential drop in income income when going overseas, is common to many expats who then have to make changes to accommodate it. Again, your experience of a property falling in value is very common to many people across the globe.

Many expats who move overseas in search of employment or retirement and who have done this on an expected permanent basis, actually come back to the UK after a few years or so.

So I don't think you really anticipated the risks involved and had a rather optimistic view of a life in another country in receipt of UK benefits for the rest of your life. This isn't the fault of the benefit system.