ESA and pension payout

herb66

I am currently claiming ESA due to ill health I have been told that I have to take my pension from the Financial Assistant Scheme in a couple of months when I reach 60 years of age I was wondering how this would affect my benefit payments I have no savings I could take a cash lump sum of £5108.35 and then receive £1720.38 per year or take no lump sum and get £2036.10 per year I would be very grateful for your advice

poppy12345

Which ESA are you currently claiming? If it's New style ESA or the old contributions based savings do not affect this. For pensions of up to £85/week this doesn't affect the ESA. For every £1 over this amount then your ESA is reduced by 50p week.

For Income Related ESA then saving of up to £6,000 are ignored. For every £250 or part there of over this amount and your ESA is reduced by £1.

Weekly/monthly income from a pension will reduce any Income Related ESA £1 for £1.

herb66

Hi Poppy 12345 Thank you for replying I have been in the work-related activity group since 2012 If I took a lump sum of £5108.35 (I have no savings) would they deduct this from future benefit payments Regardless I have to take a yearly income of either £2036.10 or £1720.38 when I reach the age of 60 from the Financial Assistant Scheme

herb66

poppy12345 said:

Which ESA are you currently claiming? If it's New style ESA or the old contributions based savings do not affect this. For pensions of up to £85/week this doesn't affect the ESA. For every £1 over this amount then your ESA is reduced by 50p week.

For Income Related ESA then saving of up to £6,000 are ignored. For every £250 or part there of over this amount and your ESA is reduced by £1.

Weekly/monthly income from a pension will reduce any Income Related ESA £1 for £1.

Hi Poppy 12345 Thank you for replying I have been in the work-related activity group since 2012 If I took a lump sum of £5108.35 (I have no savings) would they deduct this from future benefit payments Regardless I have to take a yearly income of either £2036.10 or £1720.38 when I reach the age of 60 from the Financial Assistant Scheme

Alice_Holt

herb66 said:

poppy12345 said:

Which ESA are you currently claiming? If it's New style ESA or the old contributions based savings do not affect this. For pensions of up to £85/week this doesn't affect the ESA. For every £1 over this amount then your ESA is reduced by 50p week.

For Income Related ESA then saving of up to £6,000 are ignored. For every £250 or part there of over this amount and your ESA is reduced by £1.

Weekly/monthly income from a pension will reduce any Income Related ESA £1 for £1.

Hi Poppy 12345 Thank you for replying I have been in the work-related activity group since 2012 If I took a lump sum of £5108.35 (I have no savings) would they deduct this from future benefit payments Regardless I have to take a yearly income of either £2036.10 or £1720.38 when I reach the age of 60 from the Financial Assistant Scheme

       A lump sum would be treated as capital. 

      When added to your existing / future savings, if you are receiving Income-based ESA, it will only affect ESA if your savings/ capital exceeds £6k.

   Assuming your ESA is now income-based (as you are not in the Support Group), the yearly income will reduces your ESA £ for £ at age 60 on.
Please confirm that your ESA is indeed income-based.

       

calcotti

Alice_Holt said:
Assuming your ESA is now income-based (as you are not in the Support Group), the yearly income will reduces your ESA £ for £ at age 60 on.

Please confirm that your ESA is indeed income-based.       

If they have been in WRAG since 2012 I think this must mean they are on income based ESA only (as you indicate) because entitlement to contribution based ESA will have ended. This does mean that any pension income will be deducted in full from the ESA (as you also say).

poppy12345

As their ESA has to be Income Related because of being in the WRAG if they have no option but to take the pension then my advice it to take to lump sum and the smaller income draw down. Though, as advised it will still reduce your ESA but there will be less to reduce if your weekly amount is less.

herb66

Excuse my ignorance as I am not the brightest, I understand that once I start to draw my pension on a monthly basis then anything I get will be deducted from my benefit payment It is the lump sum I am confused about I have zero in my account if I take the £5108.35 in a few months' time will that money be taken from my benefit payment Thanks again

sammyjammy

As you have no current savings this will have no impact and as long as your total savings remain under £6000 you do not need to declare it.

herb66

Hi sammyjammy I would think that I would have to tell DWP that I had received £5108.35 from the Financial Assistant Scheme I want to know if that will be deducted from my benefit payments once it has gone into my account

poppy12345

You do not need to tell them that you received the lump sum because it doesn’t take your total savings to more than £6,000.