ESA and over £5,500 in last 6 months

Ponsienella

Hi there,

I am about to complete a claim form for ESA for my brother and noticed one of the questions asks if you have had over £5,500 in the bank in the last 6 months. (I must admit I thought the amount that you were allowed to have was about £16k).

Can anyone advise me what the consequences of having over £5,500 is? Does it mean that you aren't able to claim ESA or do you lose a certain amount of it? He has had £7,500 in his bank at times.

Do we have to say why he had that much? My brother is suffering with a mental illness and, after living with me for a year whilst very ill, he was given a sheltered bungalow. The reason it built up has mainly been due to him neglecting himself again and living extremely frugally and spending as little as possible on food.

I am also terrified as he claims HB and CTR and, I have checked and found that he is not allowed to have over £6.5k without losing some of that. I didn't know and so they haven't been told either. If I tell them now will they go back over his records and want a load of money back off him?

I think he did have just over £8k at one point (not in the last 6 months though) because he was awarded PIP and then had an amount backdated to the date of the claim.
I made the claims on his behalf and just got him to sign the applications as he wasn't capable of doing so.

Ames

Firstly, I'm assuming that it's income based ESA and not contribution based, as they're asking about savings (I've never seen a form for either so I don't know if it's the same or different).

The rules for means tested benefits are that for every £250 or part of £250 someone has over £6000, they lose £1 of benefit. So for the weeks that he had £7500 then he'd lose £6, or £7 if it went a bit over seven grand.

I'm not sure whether he'd lose that amount off each benefit. Some of the income based benefits are what they call passport benefits, which means that even if you only get £1 of the income benefit then you get full housing benefit. I think it applies to ESA but I'm not sure.

Even if he'd had £7501 in his bank every week of the year, then the amount of ESA he'd owe would be £364 (or £1092 if it is off all benefits). Which he can obviously afford to pay back from the money he's accrued.

The £16000 you had in mind is the amount at which all entitlement to income based benefit stops.

If he's been neglecting himself maybe this will help - giving him 'permission' to spend the income on things he needs. There are companies that deliver healthy frozen meals, for instance.

Alice_Holt

For HB simliiar capital rules apply. HB cannot be claimed by anyone with savings over £16k.
Between £6k - £16k, the council will apply a tariff income that reduces the amount of HB received.

For CT support the capital limits are different, and may vary between LA. Many LA's have set the capital limit at £6k. So, I'm sorry to say, your brother may have an overpayment of CT support.
Contact the council to check this.

The PIP award would also give him a disability premium added to ESa.

Does he live alone and claim the 25% CT discount?

nannytone_2

if on income related benefit, it doesn't affect housing benefit/council tax support in quite the same way.

you could have savings of 15,999 which would reduce means tested benefit by £64 a week, but as long as any income related benefit is in payment, full housing benefit/council tax support can still be legitimately claimed.

it would only affect those not on income related benefit 9 IT'S ONE OF THOSE ODD ANOMOLY'S THAT PLAGUE THE BENEFITS SYSTEM, AND THE SAVINGS WOULD STILL NEED TO BE DECLARED)

kittykat17

Just a quickie but any backdated pip he's received is disregarded for 12 months, so if this is included in his 'savings' it can be ignored until the year is up.

tomtom256

nannytone wrote: »

if on income related benefit, it doesn't affect housing benefit/council tax support in quite the same way.

you could have savings of 15,999 which would reduce means tested benefit by £64 a week, but as long as any income related benefit is in payment, full housing benefit/council tax support can still be legitimately claimed.

it would only affect those not on income related benefit 9 IT'S ONE OF THOSE ODD ANOMOLY'S THAT PLAGUE THE BENEFITS SYSTEM, AND THE SAVINGS WOULD STILL NEED TO BE DECLARED)

Some councils have a £6,000 cut off for council tax so double check just in case.

Ponsienella

Ames wrote: »

Firstly, I'm assuming that it's income based ESA and not contribution based, as they're asking about savings (I've never seen a form for either so I don't know if it's the same or different).

It is contribution-based ESA he will claim as I've worked out he has made enough contributions. The form is the same - you just select whether you are claiming contribution or income based.

The rules for means tested benefits are that for every £250 or part of £250 someone has over £6000, they lose £1 of benefit. So for the weeks that he had £7500 then he'd lose £6, or £7 if it went a bit over seven grand.

I'm not sure whether he'd lose that amount off each benefit. Some of the income based benefits are what they call passport benefits, which means that even if you only get £1 of the income benefit then you get full housing benefit. I think it applies to ESA but I'm not sure.

Even if he'd had £7501 in his bank every week of the year, then the amount of ESA he'd owe would be £364 (or £1092 if it is off all benefits). Which he can obviously afford to pay back from the money he's accrued.

He hasn't claimed ESA yet so hasn't been overpaid anything for ESA. I just wanted to know what effect having over £5,500 will potentially have on his claim.
I am however worried about him having been given too much HB & CTR for having over £6,500 in his bank at times. It is totally my fault as I have made the claims but he will be terribly worried about getting into trouble with 'the authorities'.

The £16000 you had in mind is the amount at which all entitlement to income based benefit stops.

Thanks for explaining that. I knew it came in somewhere.

Thank you so much for your help.

Ponsienella

Alice_Holt wrote: »

For HB simliiar capital rules apply. HB cannot be claimed by anyone with savings over £16k.
Between £6k - £16k, the council will apply a tariff income that reduces the amount of HB received.

I'm just scare about actually getting into trouble for not having informed them about this.
I presume once I do the ESA claim that DWP will inform them and they will then get in touch with him about his bank balance.

For CT support the capital limits are different, and may vary between LA. Many LA's have set the capital limit at £6k. So, I'm sorry to say, your brother may have an overpayment of CT support.
Contact the council to check this.

The PIP award would also give him a disability premium added to ESa.

Does he live alone and claim the 25% CT discount?

He does live alone and claims the 25% CT discount. he actually receives 80% CT reduction which is the maximum allowed by the LA he lives in.