ESA & pension early due to ill health

KentishLady

Hello lovely people

my brother in law is currently receiving income related ESA (main phase - support group), DLA lower rate care and higher rate mobility. He has approximately 17 more years before reaching state retirement age and due to his health conditions (degenerative neurolgical condition & cardiac disease / mild emphysema) it is unlikely he will be able to return to work.

He has an old pension which he could begin to draw down from early due to ill health with a small tax free lump sum of aproximately £5k and a small annual income of £700.

If he does draw the pension down I understand the annual income would affect his income related ESA £ for £ (is my understanding correct?) so in terms of income he would not financially be any better off although he would have the satisfaction of not totally relying on benefits for his income.

We were wondering how the lump sum would be treated for ESA calculation purposes? Will this be treated as income or capital? If capital I understand that he would be below the capital limit of £6k as he has no other savings so this would not affect his ESA income. Or, would it be treated as income in which case it would almost wipe out his ESA for the current year?

Thanks for reading

KL.

Humbug40

I am more or less in a similar situation. I am 44 been diagnosed with an incurable and life limiting cancer. I am considering going down the retirement on illhealth but also claim ESA.

Did you ever get an answer to your question?

Chorlie

Humbug40 wrote: »

I am more or less in a similar situation. I am 44 been diagnosed with an incurable and life limiting cancer. I am considering going down the retirement on illhealth but also claim ESA.

Did you ever get an answer to your question?

Will you be trying to claim Income Based ESA or Contribution Based ESA.

I get an Ill Health Pension, but I claimed ESA the day after I retired (aged 39) and having worked for 20yrs I'd paid National Insurance so I could claim Contribution Based ESA. This means my savings doesn't effect my ESA and the first £85 (Gross, per week) of my Ill Health Pension and for every £ over £85, there is a 50p reduction of my ESA, so it was very worth doing. If you claim Income Based ESA and are placed in the Support Group your Pension will effect your ESA £ for £, so you might not be better off (depending on your pension amount), you would get your NI Credits, but you have to decide if you needed them or are any benefit to you.

Also, if you do claim Income Based ESA and you're not placed in the Support Group (so your in the Work Related Activity Group) you'll have to attend Interviews / Work Focus Meeting etc, so is it worth it if you're not financially better off having to attend these and the extra stress it could bring you.

Humbug40

I have been on income based ESA for about 3 years and I am in the support group. To be able to get my pension a doctor would need to sign a form saying that I am unfit for work.

Even on income based ESA you are allowed savings up to £6000 and you don't have to take the pension as an annuity. I shall have a chat with the Macmillan benefit advisor's I might not live to a pensionable age .

Thank you for your reply.