Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Aleakim
    • By Aleakim 13th Oct 18, 10:23 AM
    • 1Posts
    • 0Thanks
    Aleakim
    How does ESA have an impact on tax credits?
    • #1
    • 13th Oct 18, 10:23 AM
    How does ESA have an impact on tax credits? 13th Oct 18 at 10:23 AM
    Hi there!
    I am a little confused about our situation and just wondered if anyone could advise if they have been in a similar situation or if you know how the system works more than I do.

    My partner and I have a joint claim, I work over 30 hours and earn around £16,000 ish. My partner was in receipt of contribution based ESA payments, they switched it to Income related ESA. After informing the tax office of the change our tax credits payment increased.
    However, due to the increase the ESA payment has now stopped and we are not recieveing any type of ESA payment. I have now notified them of the change in circumstance.

    Does anyone know if our tax award will go up, down or remain the same?
    My worry is that if the tax awards lessens my partner will be eligible for ESA again and the award will forever be going around in a loop? Also, if it is going to lessen I need to be prepared as I have a six month old baby and am currently on half pay as on maternity.
    Hopefully someone can help shed some light on this situation.

    Thank you x
Page 1
    • pmlindyloo
    • By pmlindyloo 13th Oct 18, 11:03 AM
    • 11,913 Posts
    • 13,770 Thanks
    pmlindyloo
    • #2
    • 13th Oct 18, 11:03 AM
    • #2
    • 13th Oct 18, 11:03 AM
    Not sure that I am following what has happened with your OH's ESA claim.

    So, he was on contribution based ESA - which group was he in? WRAG or Support Group?

    You say that he switched to income based ESA? Were you working 39 hrs at the time? You cannot claim income based ESA if the partner is working 30 hrs so am not sure what happened here>

    Can you give us a timeline of the ESA award - whether he was on contribution Based ESA and which group - when was it switched to income based ESA and whether you were working at the time.
    Last edited by pmlindyloo; 13-10-2018 at 12:19 PM.
    • Darksparkle
    • By Darksparkle 13th Oct 18, 11:05 AM
    • 5,302 Posts
    • 3,463 Thanks
    Darksparkle
    • #3
    • 13th Oct 18, 11:05 AM
    • #3
    • 13th Oct 18, 11:05 AM
    Someone can correct me if I'm wrong but I didn't think it was possible for someone to get ESA income based if their partner worked more than 24hrs per week.
    • calcotti
    • By calcotti 13th Oct 18, 11:16 AM
    • 671 Posts
    • 434 Thanks
    calcotti
    • #4
    • 13th Oct 18, 11:16 AM
    • #4
    • 13th Oct 18, 11:16 AM
    Being awarded tax credits would not end an income based ESA claim.
    Originally posted by pmlindyloo
    Working Tax Credit income is taken into account so could end entitlement to payment of income based ESA.

    There is a bizarre loop in the rules that goes like this. If you get income based ESA you are entitled to maximum WTC. Getting WTC ends the ESA entitlement. Losing the ESAmeans automatic entitlement to maximum WTC ends. WTC goes doe. This results in an entitlement to income based ESA. Start again. I have never known how this is resolved in practice.

    As posts by pmlindyloo and dark sparkle I don’t understand the basis for an income based ESA in the circumstances described. I agree with dark sparkle that partner’s working hours are restricted to less than 24 hours.
    Last edited by calcotti; 13-10-2018 at 11:19 AM.
    • pmlindyloo
    • By pmlindyloo 13th Oct 18, 12:18 PM
    • 11,913 Posts
    • 13,770 Thanks
    pmlindyloo
    • #5
    • 13th Oct 18, 12:18 PM
    • #5
    • 13th Oct 18, 12:18 PM
    Working Tax Credit income is taken into account so could end entitlement to payment of income based ESA.

    There is a bizarre loop in the rules that goes like this. If you get income based ESA you are entitled to maximum WTC. Getting WTC ends the ESA entitlement. Losing the ESAmeans automatic entitlement to maximum WTC ends. WTC goes doe. This results in an entitlement to income based ESA. Start again. I have never known how this is resolved in practice.

    As posts by pmlindyloo and dark sparkle I donít understand the basis for an income based ESA in the circumstances described. I agree with dark sparkle that partnerís working hours are restricted to less than 24 hours.
    Originally posted by calcotti
    Not sure this is correct.

    Did you mean that because the OP is on maternity leave they would get maximum WTC?

    I am wondering if when the OP stopped working they were then entitled to income based ESA . Did this coincide with the partner's ESA WRAG ending after 52 weeks?

    However, if the OP is getting half pay (around £8000 pa) this would still have prevented an income based ESA award although we don't know if there were any disability premiums added to the income based ESA?

    And the OP would still be entitled to WTC when on maternity leave and this would be counted as income. (Will delete that part of my post as it may confuse others)

    Suggest the OP goes to CAB for a benefit check to sort this all out.
    • calcotti
    • By calcotti 13th Oct 18, 8:52 PM
    • 671 Posts
    • 434 Thanks
    calcotti
    • #6
    • 13th Oct 18, 8:52 PM
    • #6
    • 13th Oct 18, 8:52 PM
    Not sure this is correct.
    Originally posted by pmlindyloo
    https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/calculating-tax-credits/#Maximum%20entitlement%20for%20people%20on%20certa in%20benefits
    Go down to maximum entitlement for people on certain benefits

    Also
    https://www.gov.uk/hmrc-internal-manuals/tax-credits-technical-manual/tctm07041
    Last edited by calcotti; 13-10-2018 at 10:22 PM.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,048Posts Today

7,731Users online

Martin's Twitter