Help re: Housing Benefit Suspension now on contribution-based ESA

Ponsienella

Can anyone help explain this to me please?

In September my brother received an unexpected increase in pension of £210 per month. He also received a new pension of £230 per month. As he is in the support group for ESA, and also on PIP, I wrote to DWP in early October advising them of the increase in income and provided letters and payslips from the pension companies. I assumed he would receive a £ for £ deduction in his ESA.

DWP have notified his council that he is now on Contribution-based ESA and the first thing they have done is suspend his housing benefit. My brother hasn't been notified directly. Equally the DWP have only reduced his ESA by £33.49 per week so this doesn't sound right to me.

Can anyone explain:
1) Why they would suspend the HB?
2) Why would he be changed from income-based to contribution-based ESA?
3) Also he has capital in excess of £6k (he has £12k) so the council should deduct £1 per week for every £250 or part thereof over £6k. So I make that a £24 deduction per week from what they woukd contribute to his rent which is from a Hosuing Association.
Apparently there is a 65% taper relief which lady at the council didnt really understand. Can someone explain that to me please?


Thank you in advance to ayone who can help me.

calcotti

1) Housing Benefit has been suspended because his entitlement needs to be recalculated. He needs to contact his local authority ASAP to inform them of his new situation with full details of his EAsA and pensions. Previously he got maximum HB automatically because he was getting income based ESA. It now needs to be calculated to see what his ongoing entitlement is.

2) it would appear that he was getting contribution based ESA with an income based top up. The pension income is fully taken into account when working out entitlement to income based ESA and this has now been lost. Any contribution based ESA entitlement continues but there will be a deduction of 50% of any pension income above £85/week. Pension income of £440/month is £101.54/week which would result in a deduction of £8.27/week from the maximum entitlement. The entitlement for contribution based ESA Support Group is £111.65, after the deduction he will remain entitled to £103.38/week.

3) You are correct about the capital deduction. In calculating his HB entitlement he has a applicable amount. The council will compare this with his income from ESA and the pensions and there will be a deduction of 65% of any excess income (that is income which is over the applicable amount).

Ponsienella

Thank you calcotti.


I can see where you have the £111.65 from (£73.10 living expenses + £38.55 for being in the support group). His statement also shows:

Extra money for severely disabled £65.85
Disablity Income Guarantee £16.80
Total income-related amount £194.30


Does he lose the disability elements as well or is he still entitled to £194.30 before deductions for other income?



He was already receiving a weekly equivalent of £56.17 in pension. The amounts I gave were for an (unexpected) increase in this and also a new pension.


He actually receives:

Pension 1 £56.17 p.w.
Pension 1 increase of £48.65 p.w.
Pension 2 New £53.77 p.w.


So as this amounts to £158.59 per week. So, if he has a 50% deduction for anything over £85, I calculate he will lose 50% of £73.59 (i.e. £36.80). Have I calculated that correctly?

calcotti

Ponsienella wrote: »

Thank you calcotti.


I can see where you have the £111.65 from (£73.10 living expenses + £38.55 for being in the support group). His statement also shows:

Extra money for severely disabled £65.85
Disablity Income Guarantee £16.80
Total income-related amount £194.30

He will lose the SDP and disability income guarantee.

calcotti

He should be prepared to have to pay something towards his rent.

His Council Tax Reduction will also have to be recalculated.

calcotti

Ponsienella wrote: »

He actually receives:
Pension 1 £56.17 p.w.
Pension 1 increase of £48.65 p.w.
Pension 2 New £53.77 p.w.

So as this amounts to £158.59 per week. So, if he has a 50% deduction for anything over £85, I calculate he will lose 50% of £73.59 (i.e. £36.80). Have I calculated that correctly?

That looks right. That would leave £74.85 payable. However opening post says that they have only reduced by £33.49 from what he was previously getting - have I understood that right? Or did you ean that they are only showing a deduction of £33.49?

Ponsienella

calcotti wrote: »

For HB I think the applicable amount for a single person in the ESA Support Group and with the SDP will be £187.35/week in which case he could end up having to pay about £25/week towards his rent - but I may have got this calculation wrong.

His Council Tax Reduction will also have to be recalculated.

What does 'the applicable amount mean? I think I'm a bit confused because you said he will lose SDP but have referred to an applicable amount for someone in the support group with the SDP. Sorry if I sound thick but I'm just not used to these things and trying my best to understand it.

calcotti

Ponsienella wrote: »

What does 'the applicable amount mean? I think I'm a bit confused because you said he will lose SDP but have referred to an applicable amount for someone in the support group with the SDP. Sorry if I sound thick but I'm just not used to these things and trying my best to understand it.

I’ve deleted the earlier post with my guesstimate because I did it before you posted more information about the pension income so the calculation is wrong.

The applicable amount is an amount used to calculate HB. It is an amount of income that is ignored before the 65% taper rate is applied. The HB calculation will still include the SDP when working out the relevant applicable amount.

Even in ESA he is still entitled to the SDP but he is not paid it because of the income he receives from the pensions - this is what I meant when I said he will lose it.

Presumably his ESA was previously £194.30 - £56.17 = £138.13

Ponsienella

calcotti wrote: »

That looks right. That would leave £74.85 payable. However opening post says that they have only reduced by £33.49 from what he was previously getting - have I understood that right?

Yes. That's my problem. I cant tally their figures. It might be something to do with the increase in Pension 1 of £210.85 per month. They may not have taken that into account yet.

Despite my sending DWP letters and payslips they wrote to Pension Company 1 with a form for them to fill in. The pension company did fill it in but returned it to my brother and said they didn't have his permission to return it. I have since sent it to DWP so I am thinking because of close dates on stuff from DWP that they haven't adjusted for that yet.

Ponsienella

I'm really sorry for bothering you but I don't understand what you mean about taper relief. Can you give me an example to explain it, referring to him having £12k in savings and their limit is £6k.


I understand that £1 per £250 or part thereof is deducted but don't get the 65% taper relief.

calcotti

Let’s say the applicable amount is £187
His income is now £158 pension, ESA £75 and ‘tariff’ income £24 = £257
His excess income is £257 - £187 = £70.
The deduction is therefore 65% x £70 = £45.50

If his allowable rent is £100 his Housing Benefit will be £100 - £45.50 = £54.50. He has to pay the £45.50.

I may have got this calculation wrong - don’t normally try and do HB calculations manually.

There are benefit calculators available here https://www.gov.uk/benefits-calculators

Got to stop for tonight now.