NS ESA - Adding UC claim

Altior

Back again!

Some of you will be aware of my backstory, however for readers that aren't, the summary backstory is that I have/had too much capital to apply for UC, having been awarded SG as part of NS ESA last year.

It was going to happen at some point, but I suspect the CRAs have got wind of my radical reduction in income. Consequently I have no current BT deals available, and have had my oldest account's credit limit slashed to under £1K, and been informed that the account will be closed and I cannot impact that. I need to mitigate for the possibility that they might call in existing debt, so I will soon be applying for UC so I can start the SMI ball rolling.

In a week or so, another of my locked cash bonds will have matured. I will then be down to £4K locked in total (£3K in September). I am now preparing for a genuine UC application, as I will be able to go under £16K capital legitimately, by settling debt.

My questions are around the UC application, specifically. Aside from declaring capital and changes in circumstances if they occur, are there any additional commitments for someone already determined as LCWRA on UC? I am aware that I may be expected to go to the JC to prove my ID, and capital declaration, but anything regular?

The other question, on the UC application that I abandoned, I didn't see a part where I could confirm that I was already LCWRA. Is there a place for this? Do I need to list out all my health issues again as part of the UC application? How is that part of it handled, effectively. How do I make UC aware that I am already in the support group for NS ESA (if indeed, I do!). I should also be treated as a pre 2026 applicant, is it worthwhile noting that within the application somehow?

Thanks!

NedS

Easy question first - once your current Support Group status has transferred across to UC, you will be awarded LCWRA status as the UC equivalent, and that point will be asked to accept a commitments that requires you to notify UC of any changes in your circumstance. You will not be required to undertake any work related activity or attend ongoing work related appointments.

You will be required to attend appointments at the start of your claim to verify your ID and bank accounts / capital amounts, and you will be required to attend a First Commitments appointment. You can use this appointment to discuss your ESA Support Group status and to make sure it is transferred across onto your UC claim.

When making your claim, you must declare that you have a health condition(s) and are unfit for work. It is somewhat helpful if you can say you have a Fit Note from your GP, but this is not required. There is nowhere on the application itself to say you have Support Group status on ESA, so once you have made your claim I would post a note to that effect on your journal - something simple like "I have a NS-ESA claim and am in the Support Group. Please ensure LCWRA status is transferred onto my UC claim".

Sometimes this is not always done quickly, but hopefully should be done before the end of the first AP in time for your first payment. Until it is done, the jobcentre may miss your journal note and book you a First Commitments appointment. If they do, attend it and use the opportunity to tell the Work Coach (WC) about your NS-ESA SC status and get them to set the ball rolling getting it transferred across (the WC does not actually do this themselves but they can flag up it needs doing).

Once the UC claim is properly set up and you've accepted your first commitments, it should be plain sailing from there. Good luck.

HillStreetBlues

I agree with Ned
And yes you will be treated as pre 2026 as your WCA carries over.

Altior

Thanks. Sounds like it ought to be relatively straight forward.

There is potentially one niggle (as always!), that I am still due an income tax refund from 25/26. It's rather a complicated calculation as it will include the starting rate for savings. Including interest paid from multiple accounts, Nationwide fairer share et al. I didn't keep track of this, so don't exactly know how much it will be, or when it will land. I did read however, that if you are on UC, a tax refund technically needs to be reported as income, and that will be deducted from UC. Ideally, I would be able to bank this prior to the application.

nannytone_2

I never had to attend any appointments.

it all went through online

HillStreetBlues

https://forums.moneysavingexpert.com/discussion/comment/82070131#Comment_82070131

Yes, a tax refund is counted as earned income, and you need to inform the DWP.
Would it be much? as AFAIK is could be covered by your work allowance.

Altior

https://forums.moneysavingexpert.com/discussion/comment/82070162#Comment_82070162

I'm estimating £700 - £800. Taxable earnings £11721, ESA £4230 (so £3380 total taxable income), tax paid £1501. Then you get to the complicated bit, taxable savings interest and the amount of that starting rate for savings reduced by taxable earnings. A reasonable amount of interest was in ISAs, so obviously not part of the calculation. I get £1K PSA anyway due to being a basic rate taxpayer. £3380 * 0.2 gives £676 tax for definite, then whatever will be taxed out interest income after the allowances. On my estimate I will lose a little bit too much of the starting rate for savings and will pay a very small amount of tax on the interest (if I'm lucky, none).

Altior

https://forums.moneysavingexpert.com/discussion/comment/82070144#Comment_82070144

Thanks. Were you under £6K capital? From my understanding anyway, if declaring £6K or more capital, a manual verification can't be avoided. I believe they can do a remote ID verification. But I suppose, I have to prepare for the worst and hope for the best. Never been to a JC before, it would be a challenge if I need to go in, but a necessary one.

NedS

https://forums.moneysavingexpert.com/discussion/comment/82070162#Comment_82070162

UC Regs 55(4A) states:

A repayment of income tax from HMRC in respect of a tax year in which the person was in paid work is treated as employed earnings (earned income).

So yes, as there were employed earnings in that year, it will fall to be treated as income and will be subject to any work allowance (£710 disregarded as you have LCWRA and have no housing costs / are not renting)

@Altior when you receive the tax rebate, you will need to declare it on your journal as HMRC will not automatically share it with DWP via their RTI earnings feed (as it has not been reported to HMRC by an employer)

NedS

https://forums.moneysavingexpert.com/discussion/comment/82070144#Comment_82070144

That's how it should work if they get the LCWRA transferred onto the claim from ESA quickly. It doesn't always happen, so great to hear it worked as it should you you.

Whether you need to attend a face to face appointment for ID and capital verification will depend on individual circumstances. Some do, some don't

Altior

https://forums.moneysavingexpert.com/discussion/comment/82070248#Comment_82070248

Thanks, should not be a material impact in that case. All that remains is to decide how much capital to retain. Aside from £500, I'm interest free on the debt until December. But have £1420 tied up awaiting cashback via TCB, rising £130 each month. I always seem to have something a little quirky going on, finance wise! But it's pretty valuable, £760 if it all pays out as expected. £1000 of that capital has pending cash back (£300) and will be paid out by next month hopefully. At this point I'm tempted to go sub £6K capital for the UC application, and gamble on some renewed BT offers before December, since I will have substantially reduced my unsecured borrowing.