Il health Pension and ESA Conribution based query

Ccl

I have just been awarded early retirement on ill health from Teachers' Pensions. I am currently in receipt of Contribution based ESA.
Questions:
From old threads I have understood I may still qualify for some ESA but cannot find any current information. Does anyone know if this is still accurate?

Would I be better off continuing onESA and leaving my pension until I am 60?
I'm 52 now.

I am in the support group.
The difference in what I get now and what I would get as monthly payment is pennies but I would be entitled to a lump sum.
I don't need the lump sum right this moment. If I take it I will put it in ISA. Or would it be better to leave it in the TP?
TIA

GunJack

check the scheme rules, you may or may not be able to defer the TPS if it's been awarded for ill-health (and possibly with enhanced service to Normal Scheme Retirement Age), and if you do the DWP may look on this as deprivation of income/assets...tread carefully...

Prudent

I took ill health retirement from teaching last summer. You can continue to receive ESA, however may be reduced by your pension. For any pension amount over the first £85 per week you ESA will be reduced by 50p in the pound.

I did not have an option to defer the lump sum. I had already used my ISA allowance, so put the money into a saving account it will be fed into future ISAs.

I do not know your medical condition, so cannot comment on whether your ESA would continue until normal retirement age, but be aware that it will be reviewed and many people have received unfavourable decisions at review. The pension would be secure income over that time and you may be better off with both.

Ccl

Thank you.
I think I may be being a bit thick but if I take the higher lump sum and therefore lower monthly payment I will get less top up ESA?
And vice versa?
Am I correct?

Prudent

You would, but be very careful as it might not be the best for you long term. For each £1 of pension you commute you will get £12 extra in your lump sum. If you live less than 12 years after retirement you gain and if you live longer than 12 years you make a loss. You will only get ESA until your state retirement age, so you will need to do the sums and see which option is best for you. Do remember that ESA is not necessarily a reliable income and is subject to policy changes. If you got moved to the WRAG group you will only get ESA for 12 months. I also think, but would need someone else to confirm, it takes account of your pension in a different way.

Ccl

Thanks Prudent.
I'm trying to work out whether I would be better off taking the smaller lump sum (17k) and weekly payment of £115 a week and therefore I think ESA of £85 totalling £200 a week.
Or
Larger lump (30k) and weekly payment of £95 and thus ESA of £95, totalling £190 a week.
I have a permanent disability so think it is highly unlikely I would be moved from support group.
I am not due to get state pension until aged 67, so 15 years from now.
I think I just want to clarify that I have done the sums correctly.

Prudent

Based on your figures it looks like the difference is marginal. If you lived to 90 you would end up about £5000 worse off taking the larger lump sum based on your figures, although I have not factored any tax into those figures as you seem to be below the tax threshold. When I calculated your figures I got £97 a week ESA on the larger lump sum and £94 on the smaller one, which means the loss would be even less than that.

I would advise you though to read on people's experiences with ESA as having a permanent disability does not always mean you will be placed in the support group at reviews. You are also subject to changes in public policy. It may be that in time people in the support group have their payment reduced £ for £ by their pension as currently happens in the WRAG group. You may find it helpful to have the larger lump sum as a 'back up' if you ever need to appeal a decision about your benefits. However if you are claiming any means tested benefits such as help with your council tax or rent then you may need to pay these for longer from your lump sum.

You may also be able to apply for PIP. Your pension would have no impact on PIP and unlike your pension and ESA the amount is not taxable. The criteria is different and it will depend on how your disability impacts on your mobility and care needs. Again it is subject to review and the criteria may change with changes in benefits policy.