ESA, UC and Payment in Lieu of Notice and ill health dismissal after career break

samk777

Hi

I am coming to the end of my employment contract after a 3 year career break which I took due to ill health. I am applying for ill-health retirement. I am in receipt of ESA (contributions based) which is topped up with UC including an amount for housing costs. I have been advised I will receive a Payment in Lieu of Notice of over £3500 when I am dismissed on medical grounds at the end of my contract. It will arrive as a one-off lump sum payment, My contracted hours of work were 21 per week. My time in employment was over 10 years. I am in the support group for ESA and the LCWRA for UC. I also receive PIP.

1. Will this payment affect my contributions based ESA? (I have been in receipt of this for around 3 years (date of award was after all sick pay and SSP ended) and it is the old contributions based ESA, not new style ESA)

2. How will this income affect my Universal Credit? Does it affect my entitlement as well as my payments? Does it affect payments for longer than the month in which I receive it? How is this calculation made?

I don't need advice on how this will affect savings / benefits calculations as I am already aware of that, just how it will affect my entitlement to ESA contributions based, UC, and how it will affect my payments.

Can anyone advise?

Thank you in advance.

calcotti

1) the contribution based ESA is not affected.
2) it will be taken into account for UC and will nil your UC that month. It may possibly affect the next month too depending on how much your UC amount is. These ‘surplus earnings’ rules are complicated.
https://www.entitledto.co.uk/help/Universal_Credit_Surplus_Earnings

xxxxxxxx

DMG  49500  (vol 9 Chp 49) this will not affect ESA Conts.  

Your ESA Conts is definitely ESA Conts New Style, it became this, the moment you claimed UC and ESA Conts at the same time. 

UC will definitely be nil for the month that it is paid in, and I agree with the above it could affect the next month too have to wait and see.

samk777

calcotti said:

1) the contribution based ESA is not affected.
2) it will be taken into account for UC and will nil your UC that month. It may possibly affect the next month too depending on how much your UC amount is. These ‘surplus earnings’ rules are complicated.
https://www.entitledto.co.uk/help/Universal_Credit_Surplus_Earnings

xxxxxxxx said:

DMG  49500  (vol 9 Chp 49) this will not affect ESA Conts.  

Your ESA Conts is definitely ESA Conts New Style, it became this, the moment you claimed UC and ESA Conts at the same time. 

UC will definitely be nil for the month that it is paid in, and I agree with the above it could affect the next month too have to wait and see.

Thank you both for your helpful replies. May I also ask, if I resign from my post instead of being dismissed on medical grounds at this point, would it affect my entitlement to either contributions based ESA or UC in any way?

calcotti

Neither are impacted if you give up work because you have no work requirements. However I can’t see any reason why it would benefit you to resign rather than reach a settlement for dismissal on medical grounds.

samk777

calcotti said:

Neither are impacted if you give up work because you have no work requirements. However I can’t see any reason why it would benefit you to resign rather than reach a settlement for dismissal on medical grounds.

Thanks. I can't either. I was concerned about the effect on benefits of receiving a payment in lieu of notice so was considering resigning instead (although needing to explore the potential effect on pension) but it looks like the PILON is ok.