Big changes to ESA amounts in 2020/21 ???

coachman12

I have a severely disabled friend who is worrying a very great deal about changes he has heard about to ESA due soon when the 2020/21 year begins, which will result in a large decrease in his payments and affect his whole budgetary arrangements and living standards. I know nothing about benefits of any kind but I tried to help him by scouring the internet, I have failed to find any answer for him.
I wonder whether the collective expertise on this Forum can come to the rescue please. It would be very much appreciated.
As I understand it, the problem seems to lie in the transitional arrangements when migrated from Invalidity Benefit to ESA about 5 years ago ( my friend is in Support Group and is ESA contribution-based). At the time of migration, a top-up payment was given to make up the difference between IB and ESA rates. He seems to remember that the top-up would continue until either ESA catches up with the old IB or until 2020, whichever is the sooner. This would mean that people like my friend would, in 2020, lose the top-up element of his ESA and be much poorer. And yet he has received a letter from DWP a few weeks ago to say that his ESA payments would be exactly the same in 2020/21 as they are now in 2019/20. So it seems from that letter that the top-up payment is not being lost at all. It makes me wonder if the original decision some years ago about the transitional period and eventual loss of top-up amounts was dumped at some stage over the years since first mooted. Or, perhaps, the fact that my friend is in Support Group
and/or contribution-based means the whole concept of cutting ESA by 2020 did not apply to him at all. I have no idea and would really appreciate some informed advice please.

There is a second aspect of concern. Another part of the transitional arrangements delayed occupational pensions from affecting the amount of contribution-based ESA payments. Once again, my friend thinks that this arrangement was also due to expire in 2020 and be replaced by reduced ESA payments based on individuals' occupational pension rates ( which is relevant to my friend as he receives an occupational pension above the minimum level which is currently £85 per week. For every £ of occupational pension you have, above £85 per week, your contributory ESA is reduced by 50 pence. But neither he nor I can find anything that says DWP are actually going to do this in 2020, other than recollections of what they stated categorically at time of migration from IB to ESA about 5 years ago. Have they changed their minds since then ?? Was it never meant to apply to my friend in the ESA Support Group. Or is what he was told 5 years ago really going to happen and cut his benefit income virtually in half!!! That would be disastrous for him, hence his state of anxiety. So I would really like to help him but I have no idea how even begin to understand the whole concept, let alone find answers. He's tried to ask DWP----and gets no reply and no help in dealing with what they say is an individual case or even anything about the wider policy decisions. I have contacted DWP too and find that they have no idea themselves.
I appreciate this is a complex and lengthy posting but it is of massive importance to a severely disabled person who is worrying himself sick over all this.
Can the MSE experts ride to the rescue please ????? It would mean so much to clear this up and to put a vulnerable person's mind at rest ( or not !!!). Can MSE Forum members help please. And thank you for bearing with me through this tortuous posting, for which I apologise,
but we are really at a loss without expert help. Many thx in anticipation please.

calcotti

I can’t categorically state that there hasn’t been a change but I am not aware of any decision to change the original intention to end transitional payments on 5th April 2020.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/738546/dmgch45.pdf
Paragraph 45840. This clearly states an end date to the transitional addition.

The relevant regulation is regulation 21 here https://www.legislation.gov.uk/uksi/2010/1907/regulation/21
EDIT: The law has changed since I posted the above - see later post.
In respect of pensions I don’t know the answer. However in the document I have linked above see paragraph 45465. This paragraph does not include any end date to this exemption from which I infer that the protection from having pensions taken into account is ongoing (provided the qualifying conditions are met).

calcotti

On pensions see also https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/228604/9780108509087.pdf
Paragraph 114.

calcotti

As a point of interest how much ESA is your friend receiving?

Alice_Holt

Has he tried putting these questions to his MP?
(Or the Sec of State for the DWP, with a cc to his MP)

Since MP's pass the ESA legalisation, they may be able to supply the clarification your friend seeks.

coachman12

calcotti wrote: »

As a point of interest how much ESA is your friend receiving?

I am still at a loss to understand how all this may turn out. A letter just received from DWP clearly states that the total ESA for 2020/21, from 5 April, will include a top-up payment. I have been shown the letter and the top-up figure is £29 and pence. That is in addition to £74 (living expenses) and £39 ( due to being in Support Group). Does this help at all ?
Once again, I am grateful for your help on behalf of someone severely disabled.
I cannot understand the Govt's rationale in what seems like just giving a top-up for 5 years together with a warning that it will be withdrawn abruptly in 2020 when the sensible thing should have been to use the 5 year transitional period to gradually reduce the top-up year by year so that 2020 would not bring such a large loss of ESA payment in one-go and cause havoc to recipients' budget.............
Any further thoughts much appreciated. Also, on the second point ( occupational pension means-testing), the DWP, ever since the 2010 Regs have asked my friend each year exactly how much he earns from his occupational pension and , on each occasion,what it is rising by at the start of each of those transitional years----surely this points to their intention to use the info to further cut ESA by taking account of occupational pension????
Thx again.

calcotti

coachman12 wrote: »

I cannot understand the Govt's rationale in what seems like just giving a top-up for 5 years together with a warning that it will be withdrawn abruptly in 2020 when the sensible thing should have been to use the 5 year transitional period to gradually reduce the top-up year by year so that 2020 would not bring such a large loss of ESA payment.

At the time the change was made I believe the expectation was that for, most claimants the transitional addition would indeed have been largely or totally eroded by the annual increases in ESA so that no abrupt change would take place. However George Osborne then froze the main element of ESA for five years so the anticipated increases in ESA did not occur.

As to the letter your friend has received, I cannot explain it. I can’t find any information to indicate that the transition additions are carrying on past April.

calcotti

coachman12 wrote: »

Also, on the second point ( occupational pension means-testing), the DWP, ever since the 2010 Regs have asked my friend each year exactly how much he earns from his occupational pension and , on each occasion,what it is rising by at the start of each of those transitional years----surely this points to their intention to use the info to further cut ESA by taking account of occupational pension????

You are assuming joined up thinking. Even if they intend to take pension income into account from this year they would not have needed to ask about it every year, they could just have asked now. I think DWP probably don’t tailor the information requests to individual circumstances.

However one explanation may be that the pension exemption only applies to contribution based ESA. Your friend also has an entitlement to be considered for income based ESA and pension income would be taken into account when calculating this.. In your friend’s case the transitional addition appears to have been more than any income based ESA entitlement anyway but for many claimants this is not the case. DWP would however want to collect all information relevant to calculating entitlement.

coachman12

Thx calcotti. I don't think we can take the question relating to the top-up payment any further unless you come up with another brainwave. It remains a mystery ( until 5 April perhaps !!).
On the occupational pension aspect, my friend started IB circa 1993 and didn't qualify for his occupational pension to be "disregarded" according to the rules that NOW apply( "disregard" seems to have a very legalistic definition beyond my ken) although IB payment was not affected by it

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making it seem as though in fact it HAD been " disregarded." And does any of what I have just said make the slightest bit of difference anyway ??????
Are new ESA claimants subject to a reduction in the amount paid to take account of any occupational pension they receive now ??????
The " disregard" rules appear to come into force if an ESA claimant is in receipt of the higher rate of DLA/PIP. My friend IS on the higher rate of both elements of PIP so would this enable his pension to be " disregarded" ????
I have never delved into any benefit-related matters before so I have tried to do my best with the knowledge I have of Govt legislation generally and my own education ad common sense, and I find the nonsense associated with the matter in hand to be beyond ridiculous. I particularly liked your simple explanation to something I could not fathom ie. the aim to reduce payments gradually during transition was worthless because of the austerity freezing measures----and nobody in DWP ever went back to put back measures which would meet the original ( and understandable) concept of slow reduction in payments. Amazing

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so stupid ! A bit like me for not seeing it myself until you explained it so succinctly. If you work in DWP, I do hope that you will be the Permanent Secretary at some stage of your career so that there may be hope for all those who are some of the most vulnerable in society and need sensible and comprehensible help. My thx once again. Any further thoughts would be most welcome. Regards.

calcotti

For ESA the normal rules are that a deduction of 50% of any pension income above £85/week is made from the contribution based ESA payable. It is taken fully into account for any income based ESA calculation. Being in receipt of PIP makes no difference to these rules.

My understanding of the pension disregard is that if pension income would have fallen to be disregarded under IB based on a claimants circumstances at the time of transfer then pension income will be disregarded under ESA for that claimant under there doesn’t appear to be a time limit. If the conditions are met i had been reading it that it doesn’t matter if the pension started after the transfer but reading it again I am not sure about that. Did your friends pension income start before or after his IB to ESA transfer?

However it is not clear and I may have misunderstood. The legislation is all made up of amendments to other bits of legislation which makes it very difficult to get a clear picture. This is not helped by the fact that legislation.gov.uk is usually full of pending revisions which means that it’s a challenge just to confirm the current legislation let alone understand it.

In the case of your friend he was on IB prior to 6th April 2001 and has been continuously on benefit since and I read this to mean that a pension disregard applies based on https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/738546/d paragraph 45465

Certain pension payments or PPF periodic payments, described at DMG44716 et seq, do not fall to be deducted from ESA(Cont). In addition any pension payment or PPF periodic payment is disregarded where
1. the claimant was entitled to IB immediately before conversionto ESA and
2. IB was not reduced by a pension or PPF payment because
...
2.3 the claimant was entitled to IB before 6.4.01 on any day of IfW in a PIW which began before and continues after that date.

Note: Where the conditions in 1. and 2.1 – 2.3 are satisfied, it is irrelevant that the pension or PPF payment began after the condition in 2.1 – 2.3 was satisfied.

I have no intention of working for the DWP!

coachman12

I hope I am not overstaying my welcome, calcotti, but you asked a specific question in your last post and I feel courtesy demands an answer for you. You asked if occupational pension started before or after his IB to ESA. The answer is "Yes, well before that", circa 1993.
I have to admit that I have "lost" you when it comes to the greyed part of your post, most especially the last bit headed " Note." I feel " thick " in saying that, but I'm afraid a University Degree seems to be of no use whatsoever when it comes to this impossibly convoluted primary and secondary legislation and related explanatory literature. Just imagine how severely disabled benefit recipients are bewildered and frightened----and that is the reason why I have become involved in all this : in the hope of stopping a fragile friend from having to fret more and more. And your help is a real kindness. Thank You.
BTW, like you, I too, feel disinclined to work for DWP after everything I have seen since I started looking in to this case.........................
And so to bed. Goodnight.