Permitted work under ESA - and effect of a private pension on the max earnings

nicdigby

Hi,
Am in late 40s and a stage four cancer patient. I receive contribution-based ESA. I also get a private pension of £50 per week paid out to me by my former company (issued due to serious ill health). 
Am wanting to try to work for a few hours per week (and have sent the form off to the ESA people accordingly and it does not clash with my ESA reasons for not being able to work). Just want to check though

1.  I can earn up to £140 per week permitted earnings?
2.  these earnings are NOT taxable AT ALL?
3. do I declare these earnings when I do my tax credits return? eg if I get £6000* ESA and £4000* private pension (therefore my income would be £10K) do I ALSO have to write down that I got £5000* permitted work earnings? (so my income would be £15K)? (*amounts simplified to help my brain).
4. Does my private pension of £50 per week reduce my max earnings of £140 permitted work? (eg £140-£50 = £90 per week that I could actually earn?). Or is the pension ignored for the purpose of ESA max permitted work?

Thank you!

poppy12345

nicdigby said:

Hi,

1. Does my private pension of £50 per week reduce my max earnings of £140 permitted work? (eg £140-£50 = £90 per week that I could actually earn?). Or is the pension ignored for the purpose of ESA max permitted work?

Thank you!

Can't answer your other questions but your pension is completely different to the permitted work earnings. With permitted work you can earn up to £143 (April 2021) per week ( after deductions) but you must work less than 16 hours per week.

calcotti

nicdigby said:
...
2.  these earnings are NOT taxable AT ALL?
3. do I declare these earnings when I do my tax credits return? eg if I get £6000* ESA and £4000* private pension (therefore my income would be £10K) do I ALSO have to write down that I got £5000* permitted work earnings? (so my income would be £15K)? (*amounts simplified to help my brain).

ESA permitted work has nothing to do with tax. Your earnings will not affect your ESA if the hours and earnings are within the permitted work limits but the earnings are still taxable income. They will need to be included for Tax Credit purposes and if your ESA plus pension plus earnings takes you over your tax free allowance then tax will be due.

nicdigby

calcotti said:

nicdigby said:
...
2.  these earnings are NOT taxable AT ALL?
3. do I declare these earnings when I do my tax credits return? eg if I get £6000* ESA and £4000* private pension (therefore my income would be £10K) do I ALSO have to write down that I got £5000* permitted work earnings? (so my income would be £15K)? (*amounts simplified to help my brain).

ESA permitted work has nothing to do with tax. Your earnings will not affect your ESA if the hours and earnings are within the permitted work limits but the earnings are still taxable income. They will need to be included for Tax Credit purposes and if your ESA plus pension plus earnings takes you over your tax free allowance then tax will be due.

Thank you Calcotti. Can I check, a private pension income/ income from savings interest has no bearing on the £143 limit permitted work earnings ? (eg so they don't say "actually you earned an average of £143 from permitted work but you also get £50 per week pension so actually you're only allowed to earn £93 per week permitted work earnings before you become illegible for ESA? Oh and your interest on savings is another £3 per week so that's down to £90 now?"

calcotti

Permitted work means earnings from work. Pension income, investment returns, sick pay have no relevance,

nicdigby

Thanks very much Calcotti.