Permitted savings on ESA.. a question..

bonnie43uk

I am currently applying for ESA, they have just sent me a lengthy questionaire and want to know everything about my finances which is quite correct.
I think I am only entitled to £6000 in savings. Exactly a month ago I recieved a cash lump sum of £12,000 via taking some of my pension money early at 55. I have driven an old banger for the last 10 years or more, it's served me well, it will not get through another MOT without serious cash spent on repairs. I'd like to spend some of that lump sum on a decent car ( maybe £6500), this will put me below the savings cap of £6000, but will this be seen as deliberatly spending my cash to stay within the limit, or perfectly acceptable?
I really do need a decent car, despite how it may look to ESA.
Any thoughts?

von

You can receive Income-Related ESA (which is the means tested part) if you have capital below £16,000.00 but if you have capital over £6,000.00 then £1 wil be deducted from your entitlement for every £250.00 you have over 6,000.00.

If you spend the capital that you have received on a car the ESA Decision Maker would have to decide whether you purposely deprived yourself of capital in order to be entitled to, or to increase your entitlement to ESA(IR). Unfortunately it's up to the individual Decision Maker to decide so it's not necessarily something someone else can tell you what the DM will decide.

rds60h

As you say you really need the new car, well if you are buying from a garage ask them to take your old car in part exchange and to show the fact in a breakdown on the receipt, or if they will not accept your old banger in PX then ask them to note on the receipt that it was offered but was not in a fit state to accept as a PX.
That way should DWP question your purchase of the car then you have proof that it was a necessary purchase.

bonnie43uk

Thanks for that, yes, thats a good idea to offer my car as part exchange, .. when i had it MOT'd i was given a list of things that would need repairing. It's a very old Renault Laguna that has served me very well over about 10 years, but the repair bills to get it through next years MOT would be more than the car is worth.
Thanks for your comments. I am going to ring the Dept of Work and Pensions tomorrow and tell them i intend to buy another car and see what they say.

mikey_bach

Have you taken early retirement due to illness, if so you will be claiming ESA conts so any capital you have will not effect your claim anyway....
But after your initial thirteen weeks depending on what group you get put it your capital may effect.
If you get put in the Support Group then your capital will not effect your claim but if put in the Wrag it may effect your claim after twelve months.

bonnie43uk

No, it wasnt early retirement, I found out that I was entitled to some of my pension money at 55 so I grabbed it with both hands, I've been living on £71pw JSA for the last few years and money is tight, so it came in very handy to ease my problems, and I was able to pay back family members some cash i owed them. My health isn't that great, and i felt my prospects of finding work while on JSA wasn't that good, so i decided I'd be better off on ESA, my doctor agreed aswell. On reflection now it looks like I'd have been better off on JSA as it looks as though I could well be penalized by having this cash. It's making me sick with worry.

paddedjohn

I think that you have to declare your £12k to claim jsa aswell.

bonnie43uk

Absolutely. It's not like I can hide it because it will show up on a bank statement which i have to show them. What I am saying is that if I replace my old car which is on it's last legs, I buy a fairly decent one for £6500 ish, then I dont have £12000 in my account, it will be below the £6000 requirement for me to claim ESA. I am going to ring them shortly and ask them if this will be ok.

FBaby

Do you actually need a car? I think that might be something they could possibly question, since you wouldn't need it to go to work at this stage.

paddedjohn

bonnie43uk wrote: »

Absolutely. It's not like I can hide it because it will show up on a bank statement which i have to show them. What I am saying is that if I replace my old car which is on it's last legs, I buy a fairly decent one for £6500 ish, then I dont have £12000 in my account, it will be below the £6000 requirement for me to claim ESA. I am going to ring them shortly and ask them if this will be ok.

But have you actually declared this cash to the JSA yet?

bonnie43uk

I only recieved it about 2 weeks ago. Also, I was assured by my pension advisor that as it was less than £16,000 that I would be ok. ( i have this in writing). I did speak to DWP yesterday, and they assured me so long as i can show a receipt from the car company and that my savings are now below £6000, i will be perfectly fine.
ps, i bought a Honda Jazz for £7k, leaving me with about £5k .. i got £200 as part exchange for my old banger.