Mixed Age Disabled Couple - Retiring, what benefits?

calcotti

Furzeguy said:

Wife has been claiming carers allowance for about 5 years, she would be unlikely to be able to apply for ESA new style as she has not enough working years contributions, having not worked for over 10 years

Because she has been claiming CA if she were to apply for new style ESA she can meet the six months work requirement from any year in her life. She would simply need to have been earning enough to have paid NI.
https://www.entitledto.co.uk/help/employment-and-support-allowance-contribution-based

there are situations where the first contribution condition can be relaxed for certain groups of ESA claimants meaning that these specific groups can use National Insurance contributions paid in any tax year to satisfy the first contribution condition. This could apply to you if:

• you were entitled to Carer's Allowance in the last complete tax year immediately before the benefit year in which your Limited Capability for Work began

However whether or not it's worth the bother depends on the numbers.

calcotti

Running some numbers. Have ignored your PIP payments as they will not change and in all cases full HB still seems to be payable so I have ignored that too. Have assumed no other income and no savings over £6,000.

1. Existing (correct me if this is wrong): Wife gets CA £67.25/week and you get ESA of £217.70/week (this includes personal allowance, support component, enhanced disability premium, SDP and carer premium). Total = £284.95/week.

2. Wife is put in ESA Support Group: Wife gets ESA £113.55/week and you get ESA £200.85 (the carer premium has been removed and the SDP is now a double SDP). Total = £314.40/week, a gain of £29.46/week.

3. You reach SP age and assuming you get the standard new SP £175.20/week and wife is still claiming CA £67.25/week: There is entitlement to Universal Credit of £168.26/month (equivalent to £38.83/week). Total = £281.28/week.
This assumes that you have claimed UC before reaching pension age and the UC amount includes the LCWRA element for you, the carer element for your wife and an SDP transition element of £120. The SDP transitional element will reduce over time if other elements increase (effectively freezing you total benefit amount for a number of years until the SDP transitional element has disappeared).

4. You reach SP age and wife is on ESA Support Group, you get the Standard new SP £175.20/week and wife gets ESA £113.55/week. There is no entitlement to Universal Credit. Total = £288.75. Note that although the income is slightly higher than for scenario 3 you would no longer have access to free dental care or free prescriptions for your wife because you would no longer be receiving a means tested benefit - although you might be ale to qualify through the NHS Low Income Scheme. (In this scenario if you were getting help with rent through UC you would have entitlement to UC - but it would not cover all of your rent.)

5. There is a fifth scenario if your wife claims and is successfully awarded ns-ESA Support Group and then withdraws her CA claim completely so that she is no longer treated as caring for you. You would then have the double SDP in your ESA now (as in scenario 2) and if you claimed UC before reaching pension age would qualify for the higher SDP transitional element of £405 instead of £120. This would result in:
You get the Standard new SP £175.20/week and wife gets ESA £113.55/week. There is entitlement to Universal Credit of £89.71/month (equivalent to £20.70/week). Total = £309.45/week. 
This assumes that you have claimed UC before reaching pension age and the UC amount includes the LCWRA element for you, and SDP transition element of £405.

They don't make it easy do they!
NOTE - All the above is based on current benefit rates - if the government withdraws the 'temporary uplift' to UC of £90/month that would obviously change the results for any UC figures.

A stark fact is that when you reach pension age your total income will, at these rates, be broadly similar to existing (although without the current UC increase you could actually see a fall in your income). Before the government changed the rules for mixed age couples you would have seen a significant increase in your benefit entitlement because you  would have been able to claim Pension Credit.

Furzeguy

Calcotti - Thank you so much for all your efforts. I read the last posting you made and my head was spinning LOL.

It seems we will be at worst a couple of pounds down when I reire so not too bad. I think we will continue with wife claiming CA and ignore ESA for her as although she cant work and SHOULD qualify for LCWRA you never know with the DWP and I am advised that getting CA she will not have to be available for work anyway. I shouldnt have married such a young beautiful wife 30 years ago ... then we could get Pension Credit but I am not complaining - we are very happy, being well looked after and get a lot more than many struggling young families do.

We may even end up with a bit more money I have now been told. You see we pay £127 a week to the Council as a contribution towards our social care and that is means tested. In Novemebr when I am officially a pensioner I am told that the council will allow a bigger chunk of income to be disregarded and so we may payy less for care, leaving us overall better off. We shall have to wait and see.

Once again, Thanks for all your help.

Furzeguy

Oh I almost forgot. How soon before I retire and my ESA ends should we claim Universal Credit? A few weeks or a month or two?

calcotti

Furzeguy said:

Calcotti - Thank you so much for all your efforts. I read the last posting you made and my head was spinning LOL. 

Mine too! I wanted to do it though because the revised rules for mixed aged couple (MAC) are still relatively new and it is interesting to see how they impact people. I am a bit shocked to see that in some instances claimants will see a drop in income when one reaches pension age.

Furzeguy said:

Oh I almost forgot. How soon before I retire and my ESA ends should we claim Universal Credit? A few weeks or a month or two?

The important thing is to claim before you reach pension age. Even one day later and you will not get the LCWRA element included from the start leave it more than a month after pension age and you will not get the SDP transition element at all.

If you claim it now you would still get your contribution based ESA, your wife would still get CA and you would get a UC payment which will bring your total to the equivalent of £281.28 (as in scenario 3).

Definitely do not claim it until until after the annual updating in April otherwise you will see an erosion of the SDP element. I wouldn’t leave until the last few days before your birthday either in case you have any difficulty making the claim.

Incidentally UC is paid monthly so you will have a change in your payment pattern. There may also be a bit of disruption during the first month because UC don’t always get the information they need from ESA. UC is claimed and managed on line - going by your posts here I assume that will not be a problem.

Although I am fairly confident of everything I have posted you may wish to double check with a local advice agency if you can access one.

just to check - did I get your existing ESA amount correct?

Furzeguy

Hi, Yes you did get my existing ESA correct. When I transfer from ESA to UC will I have to go through a new Work Capability Assesment .. they are sheer murder and I was hoping not to have to do any more LOL

calcotti

Furzeguy said:

Hi, Yes you did get my existing ESA correct. When I transfer from ESA to UC will I have to go through a new Work Capability Assesment .. they are sheer murder and I was hoping not to have to do any more LOL

Reassuring to know the ESA calculation was correct.
No,  if you are in the ESA Support Group you will be treated as having LCWRA and entitled to the LCWRA element without a reassessment. Once you reach pension age you will not be reassessed again, as a pensioner with enhanced rate DL PIP you are automatically entitled to be treated as having LCWRA.

I can quite understand why your wife would not want to put herself through a WCA!

calcotti

Further note. The calculations I have done are based on you getting the standard pension amount. If your pension is less then the UC entitlement will be higher and the total benefit income will be the same. Similarly if the pension is higher any UC will be lower but the total will be the same. The one thing that would produce a different result is if the pension is high enough, due to past earnings related additions, to result in no UC being payable. I still think it is therefore sensible to get a pension forecast because there’s no point applying for UC if there will be no entitlement.

We can update the calculations when the pension is known and when we know the government’s plans for UC beyond April.