ESA support group, tax and savings
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Iwanttobefree
Posts: 2,534 Forumite
Hi all.
Having been put back in the ESA support group and awaiting back pay for nearly two years, two questions spring to mind.
1) I have £2500 saved from a lump sum pension I was allowed to take early for health reasons, I've found a lot of confusing info about how much savings I'm allowed to have, I'm worried that the lump sum payment might take me over it, does anyone know for certain what it is (gov site very confusing). Almost all ( if not all) of the lump sum arrears payment will go to pay off creditors for credit card debts tat have been put on hold the last two years due to having no income.
2) The lump sum pension was for £10342.57, they taxed me on it and I claimed it straight back from the taxman as I had had zero earnings.
I received this around November last year (both pension payout and tax rebate).
Note, this was a one off payout, I am not getting a pension income.
Most has been spent on needed essentials such as new (to me) car etc and as I said, we have £2500 put away for emergencies.
The gov site is very confusing as to whether ESA support is taxable, I presume it is.
ESA support over a year is approx £5720, with my pension that makes a total of £16062.57.
Presuming I'm correct and ESA Support group is taxable, I will owe the tax man some money. Will the DWP pay this or do I need to contact the tax office?
Many thanks
Having been put back in the ESA support group and awaiting back pay for nearly two years, two questions spring to mind.
1) I have £2500 saved from a lump sum pension I was allowed to take early for health reasons, I've found a lot of confusing info about how much savings I'm allowed to have, I'm worried that the lump sum payment might take me over it, does anyone know for certain what it is (gov site very confusing). Almost all ( if not all) of the lump sum arrears payment will go to pay off creditors for credit card debts tat have been put on hold the last two years due to having no income.
2) The lump sum pension was for £10342.57, they taxed me on it and I claimed it straight back from the taxman as I had had zero earnings.
I received this around November last year (both pension payout and tax rebate).
Note, this was a one off payout, I am not getting a pension income.
Most has been spent on needed essentials such as new (to me) car etc and as I said, we have £2500 put away for emergencies.
The gov site is very confusing as to whether ESA support is taxable, I presume it is.
ESA support over a year is approx £5720, with my pension that makes a total of £16062.57.
Presuming I'm correct and ESA Support group is taxable, I will owe the tax man some money. Will the DWP pay this or do I need to contact the tax office?
Many thanks
The way things are going, soon we are all going to be victims of something or other.
Who will we blame then?
Who will we blame then?
0
Comments
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Need just a little bit more...are you getting income based ESA or just contribution based ?
https://www.gov.uk/income-tax/taxfree-and-taxable-state-benefits0 -
I infer from your figure of £5720 for the year that you are getting contribution based ESA. You are correct that contribution based ESA is taxable. Any tax due will not be deducted by the DWP, you will have to pay it yourself. You should get a P60 from DWP in due course confirming the taxable amount for the year.
Was any of the pension lump sum tax free? Usually 25% of the sum would be tax free. If so this would reduce your taxable income for the year and therefore the tax due.Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.0 -
I infer from your figure of £5720 for the year that you are getting contribution based ESA. You are correct that contribution based ESA is taxable. Any tax due will not be deducted by the DWP, you will have to pay it yourself. You should get a P60 from DWP in due course confirming the taxable amount for the year.
Was any of the pension lump sum tax free? Usually 25% of the sum would be tax free. If so this would reduce your taxable income for the year and therefore the tax due.
Ah yes, that helps. I forgot about that. So £7500 plus £5720 makes £13220 earnings 2018 - 2019.
Can earn £11850 before tax so will only be taxed 20% on £1370 which is £274The way things are going, soon we are all going to be victims of something or other.
Who will we blame then?0 -
Need just a little bit more...are you getting income based ESA or just contribution based ?
https://www.gov.uk/income-tax/taxfree-and-taxable-state-benefits
I'm in the support group whatever that meansThe way things are going, soon we are all going to be victims of something or other.
Who will we blame then?0
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