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Does a loan count as capital for income related ESA?

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Spitfire72
Spitfire72 Community member Posts: 1 Listener
Hi, I wondered if anyone could help please. I can't seem to find an answer online anywhere. My husband and I jointly claim income related ESA although the claim is in my name. We both also claim PIP.
We currently have debts of around £12,000 - not secured, they are credit cards/mail order,  etc. We have looked into getting a loan to.pay them off as we are being hassled by creditors and threatened with bailiffs. If we took out a £20,000 secured loan, to pay off the debts and get a pressure equalising system put into our loft to help with condensation and mould in our property, would the DWP class this as capital or savings and stop our ESA? I'd like to get an idea before we talk to them in case it affects our claim anyway. Many thanks

Comments

  • woodbine
    woodbine Community member Posts: 12,093 Disability Gamechanger
    edited November 2023
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    @Spitfire72 good afternoon and welcome to scope, I'm not sure that with benefits as your only income that you would get a secured loan except maybe at high APR's, there are other options and a debt charity like "step-change" would be a good place to start for advice.
    As for condensation etc would a dehumidifier not do the job ? and cost around £150.
    My advice is always to think very carefully about going into debt to pay off debt.

    2024 Election won

  • poppy123456
    poppy123456 Community member Posts: 56,982 Disability Gamechanger
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    Yes, it will count as capital. When claiming legacy benefits paying off debt can be considered as deprivation of capital unless that debt is immediately repayable. If you have proof with letters from creditors and bailiffs then i would say they are immediately repayable.

    If you do have this loan you will need to report the changes to all means tested benefits you claim and let a decision maker make the final decision.

    I'm not sure about home improvements such as a pressure system though, sorry.
    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • ReganWalker
    ReganWalker Community member Posts: 1 Listener
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    Thanks for the info, I also want to know about it.
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  • poppy123456
    poppy123456 Community member Posts: 56,982 Disability Gamechanger
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    Thanks for the info, I also want to know about it.

    Please see my comment here.

    Yes, it will count as capital. When claiming legacy benefits paying off debt can be considered as deprivation of capital unless that debt is immediately repayable. If you have proof with letters from creditors and bailiffs then i would say they are immediately repayable.

    If you do have this loan you will need to report the changes to all means tested benefits you claim and let a decision maker make the final decision.

    I'm not sure about home improvements such as a pressure system though, sorry.


    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
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