Will ESA be lost with a temporary lump sum hitting my account?

JustMe1954

My 61-year-old mother is currently in receipt of ESA, but is scheduled to get a lump-sum payment from her private pension next month. This amounts to £25,000, but will immediately be whittled down to £6,000 due to the requirement to pay-off the outstanding debt in her mortgage, with it having come up £9,000 short upon maturity. The other money is to pay-off credit card debt and loans.

Can you please help advise whether this large amount hitting her account will mean she's no longer entitled to ESA, or whether it's fine as she's literally using it to immediately pay-off necessary and due debts. I believe the limit is £6,000 for savings, but I wasn't sure if an immediate transfer to take it below that amount means it doesn't disqualify her.

We've tried contacting all the usual suspects but even the government says they can't pre-judge this case, and she'll have to go ahead with it and cross her fingers, which sounds ridiculous, and actually completely wrong. But we've hit a brick wall and need some advice.

Are they likely to be OK with it, but require a view of the transactions on her credit cards? Will they query whether paying off a debt on a couch is a valid use of money, for instance? Or is there a hard stop and if you have that money in your account at any point, it doesn't matter whether it's going out to pay debts?

Thanks in advance for your help,

Ames

People will need a bit more information to properly advise.

What kind of ESA - contributions or income based?
Which group - Support or WRAG?
Any other benefits - housing, council etc?

Are you aware of the idea of 'deprivation of capital'? Someone can be treated as still having the money if the DWP decide it was spent so as to be able to claim benefits again.

Credit cards and loans are unlikely to be allowed, unless they have CCJs against them.

HappyMJ

JustMe1954 wrote: »

My 61-year-old mother is currently in receipt of ESA, but is scheduled to get a lump-sum payment from her private pension next month. This amounts to £25,000, but will immediately be whittled down to £6,000 due to the requirement to pay-off the outstanding debt in her mortgage, with it having come up £9,000 short upon maturity. The other money is to pay-off credit card debt and loans.

Can you please help advise whether this large amount hitting her account will mean she's no longer entitled to ESA, or whether it's fine as she's literally using it to immediately pay-off necessary and due debts. I believe the limit is £6,000 for savings, but I wasn't sure if an immediate transfer to take it below that amount means it doesn't disqualify her.

We've tried contacting all the usual suspects but even the government says they can't pre-judge this case, and she'll have to go ahead with it and cross her fingers, which sounds ridiculous, and actually completely wrong. But we've hit a brick wall and need some advice.

Are they likely to be OK with it, but require a view of the transactions on her credit cards? Will they query whether paying off a debt on a couch is a valid use of money, for instance? Or is there a hard stop and if you have that money in your account at any point, it doesn't matter whether it's going out to pay debts?

Thanks in advance for your help,

The intention of the lump sum pension payment was to pay off the mortgage, loans and credit cards so as soon as she does that...makes the payment...same day...then no that won't affect her benefits.

She never intended to be in debt and have savings payable to her at this time. She got into debt borrowing against this future lump sum to acquire something she either wanted or needed at the time and her income was not sufficient to pay cash.

Pay it all off the same day she gets it and it'll all be okay.

They cannot prejudge and they won't so don't even try to get confirmation from them as they won't give it.

The income she gets from her private pension will affect her ESA claim though.

JustMe1954

Thanks, guys. I'm already feeling a lot more informed that via the official channels!

Ames - just getting that info for you.

HappyMJ - there's no income from the private pension at this point. It's a lump sum now, and then a bigger one in several years.

marliepanda

You say the debts are 'due' I can see this with the mortgage shortfall, however...

Are the loans due? That's unusual.

Same with the credit cards?

HappyMJ

marliepanda wrote: »

You say the debts are 'due' I can see this with the mortgage shortfall, however...

Are the loans due? That's unusual.

Same with the credit cards?

Credit cards send a bill every month asking for payment so yes they are due.

Paying the loan off will save interest in any case so even if DoC it's going to save money.

Anyway a pension is income. It's not capital so DoC doesn't apply. You can spend income however you like.

If it wasn't spent straight away it would become capital and DoC applies.

JustMe1954

The mortgage is due, but you're right that the credit cards by their nature could continue to be dragged on for any period of time.

Is it likely that it's just the mortgage which they'll tolerate as being paid, in that case?

marliepanda

HappyMJ wrote: »

Credit cards send a bill every month asking for payment so yes they are due.

Paying the loan off will save interest in any case so even if DoC it's going to save money.

Anyway a pension is income. It's not capital so DoC doesn't apply. You can spend income however you like.

I was replying to the OP.

I lost faith in your posts after you removed the bit in your signature about being a 'happily retired landlord' whilst 'panic asking' about housing benefit.

HappyMJ

JustMe1954 wrote: »

The mortgage is due, but you're right that the credit cards by their nature could continue to be dragged on for any period of time.

Is it likely that it's just the mortgage which they'll tolerate as being paid, in that case?

Pay the lot. She is using pension income to pay the bills she won't have a problem.

HappyMJ

marliepanda wrote: »

I was replying to the OP.

I lost faith in your posts after you removed the bit in your signature about being a 'happily retired landlord' whilst 'panic asking' about housing benefit.

And...I've confirmed that if I'm required to leave the country then my partner would get full ESA, Housing Benefit and Council Tax Reduction. Thanks for your advice telling me she wouldn't get a penny.

marliepanda

HappyMJ wrote: »

And...I've confirmed that if I'm required to leave the country then my partner would get full ESA, Housing Benefit and Council Tax Reduction. Thanks for your advice telling me she wouldn't get a penny.

Why remove the signature then? I had no input on that thread...

Anyway, back to the OP. Due debts are payable, but loans and credit cards are not nevessarily due and you're talking about paying over 10grand of loans and credit cards. That's unlikely to be ovrlooked...