ESA, Lump Sum & Universal Credit

JackJones456

[FONT=&quot]I am new to this forum and have some questions if anyone can advise me please.[/FONT]
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[FONT=&quot]My mum is due to receive a lump sum pension pay out after tax deduction of around £10,750 in June 2018. She is claiming Income Based ESA – I am her DWP Appointee. This amount will take her over the £6K threshold by about £4,750. How much approximately will the DWP take out of her IB ESA – she gets £370.80 every 2 weeks.[/FONT]
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[FONT=&quot]Universal Credit rolls out in our area in May this year. When I advise the DWP of this lump sum pension, will they try to make me claim Universal Credit for my mum? My understanding is that it is for New Claims only.[/FONT]
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[FONT=&quot]My mum claims full Housing and Council Tax Benefit – will this be reduced in any way?[/FONT]
[FONT=&quot]When the lump sum goes into my mum’s account it will pay off her overdraft, will the DWP class it as deprivation of capital or would the overdraft reduce the £4,750 approx figure over the threshold?[/FONT]
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[FONT=&quot]Can I use this money within reason, to purchase things which will make her life better? Can anyone advise of the items that would not be classed as deprivation?[/FONT]
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[FONT=&quot]Finally, as already mentioned, UC rolls out in our area in May 2018 for new claims. My mums IB ESA is awarded until 2019. When the next ESA 50 arrives will they class it as a 'new' claim for UC purposes?
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[FONT=&quot]Thanks for any advice.[/FONT]

TELLIT01

Reporting the receipt of a lump sum will not mean she has to claim UC. She will lose approximately £20 per week from her ESA, but you should inform ESA regularly as the savings level drops.
How much is her overdraft?

JackJones456

Thanks very much for your reply Tellito1. The overdraft limit is £3K but it never gets used to that extent.

pmlindyloo

Since your mum will still be entitled to some income based ESA then she will still be entitled to her HB and CTR so there should be no change there.

As regards the deprivation of capital issue you can read about it here:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/626778/dmgch52.pdf

52832 onwards

My understanding is that the overdraft would be immediately repayable so not deprivation plus paying it back would presumably avoid high interest charges (mentioned in the link)

The overriding principle about deprivation of capital is that spending money was done to keep/increase the ESA. There are no hard and fast rules about it but extravagant spending would be a no no.

The easiest way to avoid any scrutiny is to write and say what your mum would like to spend money on to improve her life. Once a written reply is received (keep it safe!) and she is given the OK then there can be no question that it would be deprivation of capital. (also in the Decision Makers Guide)

Alice_Holt

The reduction to her IB ESA is £1 pw for every £250 over the £6k.

"If your capital is between the lower and upper limits, it is treated as generating income. This is called ‘tariff income’: £1 a week for every £250 (or part of £250) above the lower limit is included as your income in the income-related ESA calculation."

Is she in receipt of DLA or PIP?

"My mums IB ESA is awarded until 2019. When the next ESA 50 arrives will they class it as a 'new' claim for UC purposes? "
No, but should she fail the WCA it is a possibility and she should get clear advice from an advice agency on her options (she is best not to rely solely on what the DWP say).

pmlindyloo

Alice_Holt wrote: »

The reduction to her IB ESA is £1 pw for every £250 over the £6k.

"If your capital is between the lower and upper limits, it is treated as generating income. This is called ‘tariff income’: £1 a week for every £250 (or part of £250) above the lower limit is included as your income in the income-related ESA calculation."

Is she in receipt of DLA or PIP?

"My mums IB ESA is awarded until 2019. When the next ESA 50 arrives will they class it as a 'new' claim for UC purposes? "
No, but should she fail the WCA it is a possibility and she should get clear advice from an advice agency on her options (she is best not to rely solely on what the DWP say).

I must admit I cannot work out what your mum is receiving as regards her ESA so please answer Alice's question about DLA/PIP.

I am wondering how old your mum is?

The reason I am asking is to see whether she would be eligible for Pension Credit which has a higher rate for capital - £10000 rather than £6000. Also anything over is deducted at a rate of £1 for every £500 so she would be better off if she were eligible.

Look at her ESA award letter and it should tell you the components that make up her ESA.

JackJones456

Thank you pmlindyloo for answering the question about Housing and Council Tax Rebate. I will take a look at the link you have provided relating to deprivation of capital.

Thank you Alice Holt for the information relating to ESA and £1 for every £250 "If your capital is between the lower and upper limits, it is treated as generating income. This is called ‘tariff income’: £1 a week for every £250 (or part of £250) above the lower limit is included as your income in the income-related ESA calculation." I'm really sorry but I can't get my head around what you are telling me. Can you simplify it for me please - sorry!

Yes, mum is in receipt of PIP.

With regards to the ESA50, thanks for confirming it would not be classed as a new claim with regards to Universal Credit. After the next ESA50 my mum will reach retirement age, not sure what happens after that. The last ESA50 was about 2 years overdue, not sure if they have caught up yet.

JackJones456

pmlindyloo, mum is now 62. Her retirement age is 66. Yes she receives PIP, lives alone so gets the premiums.

Ames

Tariff income:

The DWP deduct a set amount from benefits for savings, instead of basing it on what interest you actually earn. You probably won't be surprised that the amount they deduct is higher than actual interest is.

For every part of £250 above £6000 in savings, they reduce benefits by £1.

You say she'll have around £10,750. If she has between £10,500 and £10,749 she'll lose £23 a week. If it's between £10,750 and £10,999 it'll be £24 a week. Between £11,000 and £11,249 £25 a week and so on.

JackJones456

Hi, so my mother is due to have this lump sum pension pot paid into her account the end of this month, approx £10,500, a part of which is Tax Free. I am her DWP appointee.

She has a £3K overdraft which would be swallowed up with some of this money.

To confuse the issue, her bank account used to be a joint account with both myself and my mother. I opened my own bank account about 12 months ago purely for Child Maintenance purposes.

I didn't bother moving my DWP benefits into my new account as it was easier for me to manage everything via my mother's account as it was our joint account since 2004.

Anyway, when the lump sum lands in my mother's account and the pension breakdown statement arrives, what do I have to do. I know I have to contact the DWP, but am I able to make an appointment at my local job center as I will have to explain that not only do my mum's benefits go into her account, but also mine. Is there a long waiting period to get an appointment for matter such as this? Additionally, I am going to declare the lump sum and take to pension breakdown. I feel it is too much information to discuss on the telephone and I expect they will want to see my mum's bank statements - how many do you think they will want to see?

Thanks for reading this post, any advice of whom I should contact and when. I would prefer to wait until the money had landed in her account, in case there is a delay, but want to prepare for the interview and have everything they may require.

TELLIT01

You can't really make an appointment until you have a firm date for the money hitting the bank account. Contact ESA and the council as soon as that happens and make an appointment to see them. Unfortunately you can't just see one or the other and expect them to communicate with each other. That simply doesn't happen.
You could try calling beforehand to find out what evidence they will need so at least that can be ready to go.