ESA and taking a pension as lump sum

Joanie18

Hello there. My civil partner is on Contributory ESA and in the Support group. He also receives PIP. He has Primary Progressive MS. He is 62. I have been his full time Carer since 2018 and my only income is Carers allowance. We want to take one of his pensions as a lump sum and then put into a savings account.  I know if he took the pension monthly it would affect his ESA but does taking it as a lump sum?
I am new to Scope and have seen this question asked by searching but I guess I want to put my mind at rest. There is no official information I could find on GOV.uk, infact I struggled to find much information at all online.

poppy123456

A lump sum is classed as savings for mean tested benefits. Contributions based ESA is not means tested so any savings/capital will not affect it.

A weekly/monthly draw down of under £85 per week is also disregarded for contributions based benefits. For every £1 over that amount there's a 50p per week deduction.

Is he claiming the old contributons based or New style ESA?

Joanie18

Hi there. He's claiming the old contributions based ESA. 
He gets a small monthly pension from the employer who medically retired him (NHS) so he advises the DWP every April (as requested by them) on his pension increase (if it does increase) and they determine his ESA.
Thank you for your information. I wanted to put both of our minds at rest. 

L_Volunteer

Please don't hesitate to let us know if there's anything else we can do to support you @Joanie18. We are all here for you and listening to you 

dekidecay

Hi - re contributory ESA.....I wanted to ask if you are supposed to speak to the DWP when you start getting pension payments that are less than £85 per week? I ask because although I can see everywhere it says that <£85 does not affected contributory ESA BUT starting to receive pension payments does actually represent 'a change of circumstance'. As an autistic person I am probably taking things too literally but I can't find the actual answer to this anywhere and it's causing me anxiety. Similarly, do you talk to the DWP about a pension lump sum payment.... as again, this constitutes 'a change in circumstance'. We are constantly reminded that if we do not inform the DWP about 'changes in circumstance', we risk being fined/having benefits suspended etc So sorry for long post - basically all I'm asking is if I have to discuss the above changes with the DWP even when I know it will not directly affect my contributory ESA payments? 

poppy123456

dekidecay said:

I wanted to ask if you are required to 'inform' the DWP, even when a pension payment is less than £85 per week? I can't find this information anywhere. Also, my understanding is that with Contributory ESA there is no requirement to inform the DWP regarding any lump sum payments - is this correct? Thank you!

If it's a weekly/monthly income then yes you will still need to inform them even if it's less than £85/week. If any part of your ESA is Income Related then it will be reduced £1 for £1.

You do not need to inform them about a lump sum. (assuming all of it is contributions based) if any part of it is Income Related then if the lump sum takes your total savings to more than £6,000 then you need to report it.

If you're claiming council tax reduction and the lump sum takes your savings to more than £6,000 you'll need to inform your local Authority. Some have a maximum savings limit of £6,000 before entitlement ends.

arnie

hi does the £6000 total savings count as personal savings or as a couple as my wife is still working thanks

poppy123456

https://forum.scope.org.uk/discussion/comment/938475#Comment_938475

If you're claiming means tested benefits then the capital limits are the same whether you're single or living with a partner. The maximum amount is £16,000. For every £250 or part thereof over £6,000 there's a deduction in your benefits.

If you're claiming either the old contributions based benefits or New style ESA/JSA then capital does not affect them.