Discontinuing NS-ESA could lead to group action Lawsuits.

Dav1D

Dear Sir/Madam

At present I claim NS-ESA alongside a monthly payment of my income protection insurance policy.

(Income protection polices are designed to replace up to 50% of your salary based upon your final 12 months income, in the event that you can no longer work, due to illness, beginning after a deferred period of typically one year. Unfortunately, due to various factors beyond my control, including contracting a rare disease, a delayed diagnosis of incapacitation, a dispute with a client in my final 12 months working, and worsening symptoms, I only get paid a small amount due to decreased earnings, in my final 12 months working, so I am paid significantly less than the original amount my policy was based upon.)

I only get £665 pcm insurance money. Along with £552 pcm NS-ESA which is non means tested.

That’s my total income. If you discontinue NS ESA I cannot claim UC, as UC is means tested.

The Green paper does not take into account the many millions of working people, both employed and self employed who have been sold these ‘income protection policies’, and ‘Accident Sickness Unemployment’ insurance policies through their work over the last thirty years!

My understanding is that, at the moment all policyholders, of these types of policies, are entitled to claim contribution based NS-ESA simultaneously alongside their policies.

The Green paper is proposing ending the indefinite entitlement to (contribution based) NS-ESA

 *54. Alongside levelling up the rate, this change would end the indefinite entitlement to contributory ESA for those assessed as having limited capability for work-related activity (for new people claiming). Those unemployed after the time-limited period would be able to claim UC, depending on their personal circumstances.

(Q. What do you mean ‘for new people claiming?’)

(My income protection policy specifically forbids me from claiming, certain types of income, such as income derived from investments, or offsets other types of income such as pensions etc, etc, however, my policy specifically names, Incapacity benefit, insisting that I can claim, Incapacity benefit, which I am entitled to due to having paid NI credits whilst working. Incapacity Benefit was replaced with NS-ESA. Both are non means tested benefits.

My insurance policy was designed so that I could claim NS-ESA on purpose and the terms in my policy are the standard terms in everyone of the income protection policies sold by my insurer. (BUPA)

My policy explicitly allows, and heavily leans on the assumption that Incapacity Benefit/NS-ESA will be available, to be claimed, alongside my policy, until I am 65 years old.

My policy fails to address what happens if my reliance on NS-ESA is discontinued, and a time limited payment is introduced, as proposed in consultation question 4 in the pathways to work green paper.

Consultation questions: 4. How could we introduce a new Unemployment Insurance, how long should it last for and what support should be provided during this time to support people to adjust to changes in their life and get back into work?

*153. Our expectation is that providing people with active employment engagement and a non-means tested, time-limited, financial award would allow them to get back to work, engage in meaningful activity and look for the right job, where they are able to. We want to support people to find the right work for them, fulfilling their potential, and using the skills they have, *preventing them from becoming long term economically inactive where possible. Therefore, we are consulting on how long individuals should receive the Unemployment Insurance, and what support should be available for individuals during this time (see consultation question 4).

*53. Unemployment insurance would be a new non-means tested entitlement for people who have contributed into the system. It would be created by replacing contribution-based Jobseeker’s Allowance (JSA) and Employment and Support Allowance (ESA) with a new single entitlement, paid at the current ESA rate (currently £138pw) and will be time-limited. This would provide stronger income

This exposes a potential flaw in my insurance policy design, as it doesn’t account for changes in government benefit schemes, which is a forseeable risk and should have been taken into consideration by my insurer.

Therefore the Green paper undermines the assumptions on which the policy was sold.

Have the committee considered that the cessation of NS-ESA could lead to a number of group action lawsuits against the countries biggest insurance companies? And that these policies have been sold to may millions of working people?

I will certainly be pursuing legal advice if you stop NS-ESA and replace it with a time limited non means tested alternative.

Please reconsider your proposal to discontinue contribution based NS-ESA, and consider the wider consequences of doing so

(The cessation of NS-ESA will also impact those claimants in a couple who not be eligible for means tested UC, as they would be assessed together as a household and people claiming legacy benefits would lose out as well.)

Kind Regards

XXXXX XXXXX

Dav1D

I drafted this letter as a response to the pathways to work green paper

I was thinking of sending this letter to Baroness Sherlock, or some other Lord.

I wonder that the Financial Ombudsman would make of this?

Maybe the Association of British Insurers?

Can any knowledgeable person suggest who else I can raise this issue with?

Someone who will sit up and take note?

Thanks.

Girl_No1

I'd like to think someone, somewhere, will take this up for you (and others in the same situation).

Of course, the issue of the removal of NS-ESA as a standalone non means-tested(*) benefit will affect hundreds of thousands of people, myself included.

(*) As an aside, is not entirely a non means-tested benefit. NS-ESA actually is means-tested if you have income from an occupational pension acquired via ill-health retiral.

Dav1D

Up to five million 'Income protection' policies have been sold over the last thirty years, (along with many more 'Accident Sickness Unemployment' policies), which offer flexibility as benefits provided by the policies are co-ordinated with other income sources, like Incapacity Benefit or the New Style Employment and Support Allowance (NSEA)

This combination helps provide a more stable financial situation when facing serious illness and disability, especially if the policy payments are scaled down but combined with NS-ESA one can still receive meaningful support.

This is a key design of a 'payment protection' insurance policy.