ESA & one-off divident payment

Rufi24

Hello!

I have searched the internet and other posts relating to this on this forum and would like to fact-check my understanding.

I am on legacy benefits and I receive Income Related ESA (Support Group) as well as Housing Benefit & PIP. I am one of the directors of a limited company. I am disabled and can't actually work (and haven't done any work for this company, my directorship was nominal) but the company is becoming unlimited and closing down and as a director that means I get a one-off divident payment of £2.000-3.000. I can't refuse the payment and it is causing me a lot of stress, because I am worried about the impact on my benefits.

Based on this document I found "DGM Chapter 49: Earnings of employed earners", I believe that director/shareholder dividends are classed as Capital not Income - see 1 ESA Regs, reg 112(4).

My questions are:

• 1) do you think I'm right in thinking that this will be capital not income? My worst nightmare is that this one-off payment will stop my benefits.
• 2) how do I let DWP know about this? Will they just know automatically from HMRC and I don't need to do anything?
• 3) I have been saving for a long time to pay for some private treatment, I currently have 4k and will spend that imminently. If I then get 3k through this one-off divident payment, my actual bank account balance will have never gone above 4k, so my bank account balance will have never exceeded the 6k that you are allowed to have saved before it impacts your benefits. But will it matter that the total over the month goes up to 7k?

Thank you in advance for any engagement.