Contributions based ESA, tax credits and universal credit migration

kazzyb123

I have been on contributions based ESA support group for a while. We have one child and my partner is self employed. We currently also get CTC & WTC.
We have savings over 16K gifted by a parent for a future house move but that’s a while off. I have a few questions please 
1. when we migrate to universal credit what happens to my ESA if it’s contributions based? Do I keep that and UC replaces WTC & CTC or is the ESA claim included into the migration?

2. Does transition protection means the savings won’t be taken into account for 12 months or will the amount of UC be reduced for the savings between 6 & 16K?

Thanks 

Spoonie_Turtle

kazzyb123 said:

I have been on contributions based ESA support group for a while. We have one child and my partner is self employed. We currently also get CTC & WTC.
We have savings over 16K gifted by a parent for a future house move but that’s a while off. I have a few questions please 
1. when we migrate to universal credit what happens to my ESA if it’s contributions based? Do I keep that and UC replaces WTC & CTC or is the ESA claim included into the migration?

2. Does transition protection means the savings won’t be taken into account for 12 months or will the amount of UC be reduced for the savings between 6 & 16K?

Thanks 

1. ESA stays the same.  Make sure to report your health condition/disability when you claim UC, and it's worth sending them a journal message to explicitly tell them you're in the Support Group for ESA - you're entitled to the LCWRA element from the start.

2. Savings over £16,000 will be disregarded for 12 months.  Savings between £6,000 and £16,000 should - to the best of our current understanding - mean deductions BUT the transitional protection is supposed to cover that, top up your UC entitlement to cover the savings deduction.  I haven't heard whether that's what's actually happening though, some more knowledgeable members may be more up-to-date.

huckster

Migration to UC for those on ESA is not scheduled to take place until 2028, so much could change by then.

marcia_

huckster said:

Migration to UC for those on ESA is not scheduled to take place until 2028, so much could change by then.

 I thought that was people solely on old means tested benefits not when they also claim tax credits? 

sammyjammy

marcia_ said:

huckster said:

Migration to UC for those on ESA is not scheduled to take place until 2028, so much could change by then.

 I thought that was people solely on old means tested benefits not when they also claim tax credits? 

Without knowing I would assume you are correct as they scans almost definitely won't pick up the ESA element when notifying tax credit customers of need to migrate.  ESA only talks to UC through real people looking at both systems. 

poppy12345

huckster said:

Migration to UC for those on ESA is not scheduled to take place until 2028, so much could change by then.

That doesn't apply to those claiming Tax credits as well as ESA. Contributions based ESA is not part of UC anyway. However, the ESA will be deducted in full from any UC entitlement.

Spoonie_Turtle said:

2. Savings over £16,000 will be disregarded for 12 months.  Savings between £6,000 and £16,000 should - to the best of our current understanding - mean deductions BUT the transitional protection is supposed to cover that, top up your UC entitlement to cover the savings deduction.  I haven't heard whether that's what's actually happening though, some more knowledgeable members may be more up-to-date.

Just to add a little more information to that. If the savings drop below £16,000 then the disregard will end. This means that if the savings then go above £16,000 entitlement to UC ends.

kazzyb123

Thanks everyone, does anyone have experience of what happens to the 6-16K in savings? Did it get topped back up cos of the disregard?
we can’t move at the moment and saving it for that but also the cars on its last legs so deciding what to do.
Partner also self employed so minimum income floor looks fun!

poppy12345

kazzyb123 said:

Thanks everyone, does anyone have experience of what happens to the 6-16K in savings? Did it get topped back up cos of the disregard?

Savings of between £6k to £16k tariff income will apply but will be counteracted by transitional protection.

Yamor

I'd add a couple of points:

1. As people have mentioned, you could get a transitional element (or an increased transitional element) because of the capital between £6k-£16k. However, this is calculated based on the overall position. So, if for example you are better off on UC for other reasons, then you would not get protection for the savings (although clearly you are not worse off overall).

2. In some situations, capital gifted to you which must be used for a specific purpose (e.g., to buy a house), and which would otherwise have to be given back, can be ignored for UC (and other benefit) purposes. If this may apply to you, I would go for proper advice.

Spoonie_Turtle

kazzyb123 said:

Partner also self employed so minimum income floor looks fun!

Minimum Income Floor won't apply until 12 months after claiming.