Migration when on NS ESA and Tax Credits

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SA2018
SA2018 Community member Posts: 10 Listener
Hi

We claim tax credits and receive a small amount of Working tax credit each month. We understand that when we are asked to migrate over to UC- we will have 12 months transitional protection. We won’t be eligible to claim after as we have a previous home/property and this is seen as an asset for UC purposes.

I am unwell and have been in the support group of NS ESA for just over two years I have read that when on UC my NS ESA would be taken off £ for £. 

I am unsure what that means exactly for me.

Would i lose the ESA if i migrate to UC and then keep the tax credits but only for 12 months.

Or would my ESA continue after the 12 month transitional protection for the tax credits.
We wouldn’t be eligible for the UC so that claim would end- but would the NS ESA continue?

Many thanks


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  • poppy123456
    poppy123456 Community member Posts: 57,295 Championing
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    To be clear, if you currently live in the property you own then this is disregarded from means tested benefits. It's only treated as capital if you don't live in it. 

    If you're not living in it then when you claim UC you will need to make sure you report this. It will then be disregarded for 12 months. After that time your UC will then end. There will be a deduction of £4.35/month for every £250 or part thereof over £6,000 but Transitional Protection may cover that deduction but it will depend on the figures of your Tax credits when you claim UC. Unfortunately, because TP is so complex I won't be able to advise on that. 

    Yes, your ESA will be deducted in full from any UC entitlement. The deduction from UC will be as follows... £138.20 x 52 divided by 12 = £598.86/month.

    Your ESA payments will continue to be paid as normal.  Tax Credits will end once you submit your claim for UC.

    As you're in the Support Group you'll be entitled to the LCWRA element of UC from the start of your claim. Your UC will include standard allowance, LCWRA element and any other elements you maybe entitled to. If entitled to TP then this will also be included. 

    Once your UC ends your ESA will just continue as it always has. 


  • SA2018
    SA2018 Community member Posts: 10 Listener
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    Many thanks for this.

    Yes i own a second property and i am aware that i need to inform them of this.

    Going to dig a little further.
    Currently we get about £70.00/month WTC, and £135.00 a week for CTC. Homeowners so no HB or CT support

    If managed migration would Transitional Protection mean this would be possibly be the same amount.

    New Style ESA £138.20/week as i am in support group. Am i correct in saying that it is this figure you have calculated of £598.86/month that would be taken off that transitional protected part (my ctc and wtc)- actually cancelling out more or less any UC? 

    Just trying to work out whether its worth it to even apply? As we would only be getting it fr 12 months and if the ESA is taken £ for £ how much would we receive..


  • poppy123456
    poppy123456 Community member Posts: 57,295 Championing
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    TP increases your maximum entitlement to UC. For this they will contact HMRC for your exact figures and compare them to what your maximum entitlement to UC is and the difference will be what your TP is. TP is actually an extra element of UC. 

    I can't tell you how much your TP maybe because it's a lot more complicated than just giving me the figures you gave above and for this reason I won't be able to advise with that. 

    New style ESA would reduce your UC entitlement but not the TP. 

    The deduction for ESA would not reduce your UC to zero. For UC you would be entitled to the standard allowance, LCWRA element and child element as I see you're claiming child tax credits as well. How many child elements you're entitled to will depend on how many children you have and whether they were born before or after April 2017.

    Would it be worth you applying? Yes, definitely because you have nothing to lose. If you don't apply by the deadline then your Tax credits will end anyway and then you would lose any TP you may have been entitled to. 
  • SA2018
    SA2018 Community member Posts: 10 Listener
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    Thank you.

    Finally, the second property we hold is rented out. Tax credits did not look at capital- but did take into account rental income.

    With the property value around 200k- would the fact that its capital and then the rent received is capital- then take us over the 16k- or would this all be ignored for those first 12 months due to Transitional Protection. 

    What evidence would we need to submit- we file tax and pay any tax on profit so would they use figures from HMRC or would we have to monthly update them on rent received etc. 


  • poppy123456
    poppy123456 Community member Posts: 57,295 Championing
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    Rental income is treated as capital. As your capital is more than £16,000 it would all be disregarded for 12 months. 

    You shouldn’t need to provide anything on a monthly basis for the rental income because it’s not treated as income. 
  • SA2018
    SA2018 Community member Posts: 10 Listener
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    Hi.

    May i ask- my husband helps care for his dad- well over 35 hours a week, his employment status: he is a taxi driver. He has never claimed carers allowance as he probably would have weeks where even after expenses his earnings would be over the £151 maximum.

    We have received our migration notice now to move from tax credits by mid August.

    Would the transitional protection remain in place if later on he claims the carers element? Or would adding this element cancel our transitional protection.

    Does the £151/week maximum still need to be adhered to? Or in UC does this not apply?

    Would he be better claiming it before migrating or does it not make a difference?


    Many thanks

  • poppy123456
    poppy123456 Community member Posts: 57,295 Championing
    edited May 24
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    For your husband to claim carers element for his dad, his dad must be claiming a qualifying disability benefit such as PIP daily living, DLA mid/high rate care or AA.

    If he does claim one of those then your husband needs to make sure that his dad isn't claiming Severe disability Premium in another benefit due to living alone or treated as living alone. If he does then a claim for CE would end the SDP.

    If he's not claiming SDP then he can claim it because there's no earnings limit to CE like there is with carers allowance.

    I would likely be better to report being a carer when he fills out the form because if he claims it after the first assessment period this it would reduce your TP by the same amount.