Does a loan count as capital for income related ESA?

Spitfire72

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

poppy123456

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.

ReganWalker

Thanks for the info, I also want to know about it.

poppy123456

ReganWalker said:

Thanks for the info, I also want to know about it.

Please see my comment here.

poppy123456 said:

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.