ESA and WRAC Deductions from Income Protection Insurance Payments

alexjonsson

Hi all, I wanted to add to this discussion as I have today been making enquiries relating to my own Unum PHI claim and ESA.

When I first completed the Unum health questionnaire, there was a box ticked do you get ESA - I ticked no, as I didn't have a claim in at the time. I started getting my PHI payments of 50% gross salary, i.e. no reduction of state benefits. My employer advised me that even if I put a successful ESA claim in I didn't need to tell them as it wouldn't make a difference the the PHI payment, and I was quite surprised by this.

Fast forward a few months and I get the form ESA50 from my employer (I had to request it) in order to make an ESA application. I made a successful contributions based ESA claim, but they said they couldn't actually pay me due to the income from PHI - the would just give NI credits. Fair enough I thought.

Now, I found today that it turns out (and I know it's my fault entirely as I didn't fully read the 74-page ESA regulations document) the DWP only considers you to have a PHI if your employment has actually been terminated; reference:

http://www.legislation.gov.uk/uksi/2008/794/pdfs/uksi_20080794_310815_en.pdf (page 61)

So if you are still employed, then technically DWP should pay you the ESA amount.

Why is this relevant?

1) because it's not made particularly clear during the ESA application process that PHI payments only refers to those made after termination of employment and income from PHI should not affect your ESA payment if you are still employed; and

2) depending on your company's policy with Unum it doesn't matter whether you receive ESA or not. They will pay whatever the terms of the policy are, and Unum don't care whether you are receiving ESA or not. It is down to the choices your employer has made regarding inclusion of state benefits in their policy.

Unum has a technical factsheet which outlines for which policies state benefits (ESA) are included in your PHI or not.

http://www.unum.co.uk/advisers/group-income-protection/classic-group-income-protection

So the next step is to find out which policy and terms your employer has - and this is probably the most challenging part as your HR team is probably clueless!

I have just found this all out today after having been off sick since February. Once again, I know I have no one blame but myself, but it has taken a lot of digging to work it all out.

My employer actually has the Gross Pay Policy, and I have actually been receiving 50% gross pay so I can assume my employer has opted not to have state benefits deducted as standard.

Hence, I am now confident enough to go back to DWP and state that I'm not receiving PHI, and also that I do not need to to Unum about any ESA future payments I may receive.

I'm hoping to get my ESA payments backdated to the start of my claim in June as I really do feel that without drilling down into the legislation document the ESA application form is not clear about the particular definition of PHI.

Sorry for this long post, but I wanted to be explicit in the hope that this may help someone else in the future.

Poppie68

alexjonsson wrote: »

Hi all, I wanted to add to this discussion as I have today been making enquiries relating to my own Unum PHI claim and ESA.

When I first completed the Unum health questionnaire, there was a box ticked do you get ESA - I ticked no, as I didn't have a claim in at the time. I started getting my PHI payments of 50% gross salary, i.e. no reduction of state benefits. My employer advised me that even if I put a successful ESA claim in I didn't need to tell them as it wouldn't make a difference the the PHI payment, and I was quite surprised by this.

Fast forward a few months and I get the form ESA50 from my employer (I had to request it) in order to make an ESA application. I made a successful contributions based ESA claim, but they said they couldn't actually pay me due to the income from PHI - the would just give NI credits. Fair enough I thought.

Now, I found today that it turns out (and I know it's my fault entirely as I didn't fully read the 74-page ESA regulations document) the DWP only considers you to have a PHI if your employment has actually been terminated; reference:

http://www.legislation.gov.uk/uksi/2008/794/pdfs/uksi_20080794_310815_en.pdf (page 61)

So if you are still employed, then technically DWP should pay you the ESA amount.

Why is this relevant?

1) because it's not made particularly clear during the ESA application process that PHI payments only refers to those made after termination of employment and income from PHI should not affect your ESA payment if you are still employed; and

2) depending on your company's policy with Unum it doesn't matter whether you receive ESA or not. They will pay whatever the terms of the policy are, and Unum don't care whether you are receiving ESA or not. It is down to the choices your employer has made regarding inclusion of state benefits in their policy.

Unum has a technical factsheet which outlines for which policies state benefits (ESA) are included in your PHI or not.

http://www.unum.co.uk/advisers/group-income-protection/classic-group-income-protection

So the next step is to find out which policy and terms your employer has - and this is probably the most challenging part as your HR team is probably clueless!

I have just found this all out today after having been off sick since February. Once again, I know I have no one blame but myself, but it has taken a lot of digging to work it all out.

My employer actually has the Gross Pay Policy, and I have actually been receiving 50% gross pay so I can assume my employer has opted not to have state benefits deducted as standard.

Hence, I am now confident enough to go back to DWP and state that I'm not receiving PHI, and also that I do not need to to Unum about any ESA future payments I may receive.

I'm hoping to get my ESA payments backdated to the start of my claim in June as I really do feel that without drilling down into the legislation document the ESA application form is not clear about the particular definition of PHI.

Sorry for this long post, but I wanted to be explicit in the hope that this may help someone else in the future.

You still need to inform the DWP you are receiving PHI and vice versa.

alexjonsson

Poppie68 wrote: »

You still need to inform the DWP you are receiving PHI and vice versa.

Thanks Poppie, yes I agree. Since writing this post I've had a chance to take a look at the form ESA50 again.

Form ESA50 does seem to be quite explicit in asking whether your contract of employment has ended, which I'll admit when writing my earlier post I was writing from memory and didn't think it did.

However this does not explain why DWP ruled that I would not receive ESA payments due to income from my PHI. I am now starting to think the decision was made in error by them, although I still think this is relevant to the above posters who appear/appeared to be in similar situations.

Unfortunately I didn't keep a copy of the completed form ESA50 I sent (I don't know why), but I will be requesting this from the DWP via a subject access request to see if I infact completed the form incorrectly to somehow give them the impression that my employment had been terminated.

Having revisited the form ESA50, I actually now have more confidence that they should reverse the decision and I should receive backdated payments.

Further with regard to informing the insurer Unum, I don't personally feel that it's necessary for me to inform them. The employee claim form asks if you have applied for ESA, and if not why not. Nowhere on the form does it state that you have to update them on changes in condition or circumstances (start receiving ESA); I therefore interpret that the onus is them is to ask me via any such review process that they may have. Additionally, my employer has not stipulated any terms that I have to inform them about any state benefits I receive.

adviceforall

I received esa while getting PHI but it was the contribution based not income based, I was told my PHI would be too much for income related so not sure if that's what you claimed for. It took till the end of the year for me to get my assessment and my 1yr claim is due to end this month unless I get in the support group. I actually have a decision maker ringing me tomorrow. I'm so nervous as if it gets the decision I'm unfit for work i will get the back payment of the higher amount from 3,months or so. Also if in support group my esa will continue. Don't know if the call is to help them make a decision or tell me the decision. Anyone else had this call?

alexjonsson

Hi, yes I did claim for contribution based ESA. Further to my posts at the beginning of December, I did actually receive a call from a nice old lady (actually, judging by her voice) at DWP informing me that the decision maker had found in my favour and approved a back payment from the beginning of the claim, and continuing payments going forward. So it seems it was their mistake, and for that reason I am thankful to the people on this thread for sparking my interest.

I'm afraid I don't think it's possible to answer your question without more information and you'll have to wait until they call. I wasn't advised that I would receive a call though, I was just called out of the blue. Which was nice.

All the best, please report back how you get on.

neo2609

At the end of August I will also be paid under Unum's income protection scheme. I have a letter from my workplace detailing how the sum to be paid is calculated. It mentions ESA and WRAC. I am not eligible for ESA apparently, and so do not claim it. I've never heard of WRAC - is it included in the ESA payments? I receive the very minimum PIP payment. (I've been off work since January pre and post brain tumour surgery.)

I'm hoping to return to work after August Bank Holiday anyway, so I'll only receive this type of payment once. However, if our calculations are right, I will be over £100 worse off this month compared to being on 50% of my salary as I have been for the past three months.

I could not survive on this income protection payment if I were to stay off work.

Thanks,

Julia