Effect on ESA of pension capital

ScotlandTigerblue

Hi
I’m in receipt of both contribution based ESA (support group) and income related to increase my total.
Having access to my private pension I’ve taken some drawdowns and recently had to have it all reassessed as DWP got it all confused and stopped my income related portion. It has all been reinstated now but I’d like to understand once and for all how much, if any, I can drawdown without impacting my ESA. Th money would be used for things like a new fridge, chiropractic etc so would be seen as luxuries probably. Although I spend a lot on self managing my health condition so save the NHS a fortune!
Oh and I only have a few hundred pounds in the bank at the moment whichive saved for emergencies. (I have an emdeekry Mum at thither nd of th country so always want to have eneough to get ti visit her if needed)
Can anyone help and particularly point me at where this is written down? Every time I look at gov.uk website etc I just go around in circles!
Thanks 😁

calcotti

For regular payments any pension income is taken into account in full in respect of the income based ESA. Half of any regular pension incomeabove £85/week is deducted from contribution based ESA.

If you take ad hoc lump sums from your pension funds thesaretreated as capital so only impact your ESA if your capital goes over £6000.

However if you take a number of ‘ad hoc’ withdrawals DWP will look to decide whether you are taking larger amounts to use spend over longer periods of time in which case they may decide that it should be treated as income. Very important therefore not to establish a pattern of withdrawals which DWP can class as regular.

Unfortunately pension freedoms are difficult for benefits system to deal with. DWP simply get information from HMRC about payments and this will often trigger an investigation.

If you take a lump sum withdrawal you need to be prepared to explain what specific purpose you need it for.

There is general information here https://www.gov.uk/government/publications/pension-freedoms-and-dwp-benefits/pension-freedoms-and-dwp-benefits

Detailed guidance used by the DWP is here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/721798/dmgch51.pdf. See para 51052 and 51053, then 51535 onwards.