ESA and private pension

Mark4321

Hi ,
I am on ESA Contribution based and in the Support Group from 2014 , same year ( before ESA) was granted with my private ill pension. Obviously when I was applying for ESA
I have informed DWP about this providing them all data they asked in the questionare including amount,my policy number and details of my ill pension provider. I have informed them later twice about my ill pension ( last time in Dec 2015 when I asked DWP for mandatory reconsideration as they placed me in WREG group and I was successful ). In Aug 2016 due to my condition deterioration I was placed in the higher group resulting in more money from my ill pension. Yesterday I have received letter from DWP that I made a fraud because I didn't inform them about my ill pension increase. I am shocked because first of all I had no idea I have to inform them about my private pension change. They already have all details about my ill pension and I would be an idiot by intentinally not telling them about my ill pension change to missclaim any money from DWP. Also HMRC is fully aware about my pension increase and I am obviously being taxed on it as necessary. As above, I had no idea I need to tell DWP about my ill pension change and would assume that if they have all details from me plus HMRC is aware of it any necessary amendements will be done automaticly as this is one government body. I have looked at some posts on forum and understand now that if private pensions exceeds 85 pounds a week then I will get only 50% of ESA but I am stressed out that apart of money repayment I will be charged a fine or may go to jail for a fraud as they are saying . I am not claiming any other benefits and ESA is my only one. I wish today was Monday as I would like to call DWP straightaway to find out what happens. So I am asking you for some advice as I can't stop thinking about consequences.

TELLIT01

The documentation from ESA states that they must be informed of ANY change of circumstance and it is the claimants responsibility to ensure that happens. You have also made a commonly held, but wrong, assumption that government departments routinely share information. They don't. Some information regarding things like Working Tax Credits and NI contributions are shared but little more. If information was shared it would make life a lot simpler for all involved.
To put your mind at rest - there is no way you will go to jail over this mistake. You will have to repay any over payment. You are also not completely right about what happens when your pension is over £85 per week. Your ESA doesn't reduce by half once you get more than £85 in pension, it reduces by 50 pence for every pound over £85.
For example, if your pension is £100 per week, ESA is reduce by £7.50.

Mark4321

Thanks for cooling me down. Looks like HMRC share information with DWP because they have find out about my pension increase so why they didn't do this a year ago ? I have no idea how they are going to recalculate my ESA but my pension increase was severe : now is 450 pounds gross a week and my ESA is 108,15 per week. I am not sure but accordingly to your way of getting the calculation I won't get any ESA at all ? Is it possible ? If yes am I still in the support group and what about my NIN contributions ? I have had my ESA granted until Aug 2018 when I was going to be reasesed so what happens next ? Is there any advantage of having ESA with no payments from them ? I don't quite understand why due to my private pension for which I was paying extra every month for years just in case my health goes wrong now I am loosing ESA ? I paid NIN contributions for years too. Looks like I am punished because of being preventive. If that is the law , understand but is not fair.

Mark4321

Hi again , after looking one more time at the notice from DWP I see that HMRC informed them about my additional income from pension company . But, the way DWP has been informed suggest that I am getting pension and not ill pension what may make a huge difference. First of all DWP was informed by me several times I am getting ill pension and even before I was placed in upper tier my ill pensions was higher than the allowance of 85 pounds a week so it would be recalculated as Tellit 1 is describing . But was not . So here is my question : are the rules about ESA allowance set againts ill pension too ? I can't find any information in this matter and can't believe I am the first one. Thanks for any help.

TELLIT01

"If it is CB-ESA then any other income (such as your pension) is not taken into account."

Sorry Alice but that is wrong. About the only thing which is taken into account on Conts based ESA is pension income above £85 per week. Pension income of £450 per week will wipe out any entitlement to Conts based and Income based ESA.

Mark4321

Sorry, but I still don't understand if ill pension can be treated as pension because these are completely two different pensions ? DWP were aware I am getting ill pension from 2014 and now for some reason when my case was picked by FEPS ESA problem began. Statement provided FEPS ESA by HMRC says I am getting pension not ill pension which isn't true.

Did they change the rules recently or they made mistake in the past ? For sure if ill pension income rules are the same as for pension income in relation to ESA why for years they have not taken any action ? I have to respond them within a month so please advise what to do because I am really confused what is going on .

Alice_Holt

TELLIT01 wrote: »

"If it is CB-ESA then any other income (such as your pension) is not taken into account."

Sorry Alice but that is wrong. About the only thing which is taken into account on Conts based ESA is pension income above £85 per week. Pension income of £450 per week will wipe out any entitlement to Conts based and Income based ESA.

You are quite right. I had complete brain fade!!
Hence why I deleted the post (very shortly after I posted it!).

Thanks.

To the OP,
I don't think there is any distinction between a pension on ill health grounds and a standard early retirement pension.

I would suggest you get advice from your local CAB / advice agency.

What is the increase in the pension which has triggered the DWP overpayment letter?
From a pension of £xx to £xx a week?

Since you informed the DWP of the pension initially, I do think it worth getting advice.

Mark4321

Before the increase I was getting about 150 pounds gross a week of ill pension , DWP were aware of it and have not made any adjustments to my ESA.

Alice_Holt

Mark4321 wrote: »

Before the increase I was getting about 150 pounds gross a week of ill pension , DWP were aware of it and have not made any adjustments to my ESA.

That would seem to be official error by the DWP. They should have deducted:
£150 - 85 = 65
£65 / 2 = £32

So £32 a week from your ESA. If they knew about your pension and failed to do this, then I don't believe this should be recovered.

However, the substantial increase in your weekly pension (£300 a week?) should have been notified - so they can try to recover ESA overpayments resulting from this increase.
http://cpag.org.uk/content/overpayments-and-official-error
"For most benefits, the basic rule is that an overpayment is recoverable if it was caused by misrepresentation or failure to disclose a relevant fact. Although official error is not referred to, it follows that an overpayment that was caused solely by official error is not recoverable under that rule."
https://www.turn2us.org.uk/Benefit-guides/Benefits-Overpayment/Print-Benefits-Overpayment

TELLIT01

There's something buzzing around in the back of my head about disregards of Disability Pensions in some instances. I've been away from the benefit too long to either remember the detail, or be certain that nothing has been changed since I stopped working on it. The OP should certainly be looking to get advice.

epitome

I can't remember the what the name is, it something like "Payments of ill health Insurance" it is mentioned under income disregarded guidance for ESA Conts
I can find out for you quite quickly this week.

The criteria I can remember is that you, the claimant and payee of the ill health insurance must have contributed 50% or more towards the premiums for the Insurance policy.

It does sound like FEPS have made an error.

It may be the £450 gross is to be disregarded in full.

On Monday phone ESA and ask for a call back from FEPS
When you speak to them tell them it is an ill health "pension" (I put pension in quotes, because it is an insurance policy).

Bottom line.... Don't worry either

A) FEPS are correct and you are wrong, You will have to pay back any ESA from the date of increase to the date on which FEPS became aware of the increase, but not after this date, after this date it will be official error. You will also have a £50 fine.

You are right FEPS is wrong...... and your ESA will soon be put back to £109.65 a week (£219.30 a fortnight)
I am wondering though why you said you only get £108.15 a week, maybe you made a mistake,