ESA and Savings Advice

Dafyddth Community member Posts: 2 Listener


My 17 year old son Daniel has Autism and attends a Special Needs College. He receives higher rate DLA and has an EHCP.

He has around £15,000 in a Child ISA to which he (nor anyone else) has access until he is 18 - in May 2018.

Until recently there was also £15,500 in a Halifax Young Saver Account. I, as the adult customer was the only one who could operate the account; Daniel had no access to it and was unaware of it. I closed the account on 14th July 2017.

I applied over the phone for ESA on Daniel’s behalf  on the 21st of July. I was asked about any savings so I mentioned the Child ISA, pointing out that the funds within were inaccessible. I was not asked about any previous accounts held.

Since then I have received an ESA Customer Statement form and asked to answer the question 'Have savings and investments been greater than £5500 in the six months before the date of the claim?’ Does the money that was in the Halifax Young Saver Account apply to this question (as I not my son was the one who could operate it)?

In the meantime, despite not having returned the information requested above, I have also received a decision for the claim as follows:

A total income-related amount of £73.80, but a £36.00 reduction because of the £15000 held within the Child ISA, giving a net income related entitlement of £37.80.

I have been advised previously on here that the Child ISA should not be taken into account How can I put this point to the those handling the claim?

Any advice would me most welcome.

Many thanks for your time


  • BenefitsTrainingCo
    BenefitsTrainingCo Community member Posts: 2,621 Trailblazing
    Hello Dafyddth - there are two questions going on here: 1) The fact that your son is having 'tariff income' deducted from his ESA due to DWP taking the value of his Junior ISA into account and; 2) the issue of the previously held Young Saver Account.

    I am just going to deal with question 1 in this post.

    Child ISA: I'm taking this to mean a Junior ISA, rather than the Child Trust Fund. In my opinion, (which is not legal or binding in any way, it's just an opinion!), the DWP could be challenged on their decision to  treat the Junior ISA as capital, and the consequent decision to apply the tariff income formula to it. The formula dictates that they have to take into account as income £1 per £250 chunk you own in excess of the threshold of £6000 - hence £36 a week coming off your son's income related ESA. My opinion is that the DWP should either i) disregard the Junior ISA completely; as far as I'm aware, Junior ISAs can only be accessed before the age of 18 by the parent / carer if the child is terminally ill or ii) treat the value of the Junior ISA as minimal - it could be treated as having a value, in that it is an asset which will be accessed in the future, but its value now, if you were to sell it on, would be very small. 
    I am using two entries in the Decision Makers' Guide which you can find here:

    This next part deals with my argument (i) above, i.e. disregarding the Junior ISA completely on the grounds it cannot be accessed.

    Para 52662 deals with ISAs:

    An individual savings account (ISA) is an investment. People can invest up to a certain amount of money in an ISA in each tax year if they are 1. 16 or over and 2. resident or ordinarily resident in the UK for tax purposes. The value of an ISA is what people would get if they withdrew their investment on the date of claim or supersession. Any income, which is paid out of an ISA, is income from capital. 

    My argument then being that the value of the ISA if it was withdrawn on the date of the claim would be zero, as the usual terms for withdrawing the funds in a Junior ISA before the age of 18 are only on the grounds of terminal illness:

    This next part deals with my argument (ii) above, i.e. if the DWP insist on treating it as capital, then the actual value of it would be very small.

    Para 52035

    People have a right to capital that is due to them now or in the future. That right can be sold unless there is something that says they cannot sell it. 

    Plus p.380 from CPAG book - 'the value of any such right (to receive a payment in the future) is its market value- what a willing buyer would pay to a willing seller. For something which is not yet realisable, this may be very small'.

    So.....I think you need to ask the DWP to reconsider their decision in this matter, and challenge them to produce the regulations or guidance which they are using to come to that decision. You are welcome to use my arguments above, although I must stress that I am not giving you an authoritative guide to the law, and there may well be a reason for the DWP coming to their decision which I am not aware of or have not considered.
    It may also be helpful if you can find the terms and conditions of the Junior ISA itself, just in case there is anything in the small print of your particular product which makes the DWP decision justifiable. If you think there is nothing in the terms and conditions of that product which would help the DWP's case, then use it for your case!

    Please let us know how you get on with this and I hope this information is helpful to you. I will deal with the Halifax account question in the next post.
    The Benefits Training Co:

  • BenefitsTrainingCo
    BenefitsTrainingCo Community member Posts: 2,621 Trailblazing
    Hello again,

    The issue of this money in the Halifax Account is a tricky one and a lot depends on if you have appointeeship responsibilities for your son's benefits and the reason for the closure of the account a week before the ESA claim was submitted. Rather than ask you more questions on this on a public forum, I strongly suggest you obtain a copy of the latest Disability Rights Handbook (either from the library, or your son can obtain a reduced price one from Disability Rights UK as someone who is on benefits) and check the rules on capital, notional capital and deprivation of capital. You must of course reply to the DWP's enquiry on this, but researching the issue beforehand I think will be helpful.
    Good luck with both of these issues, and please let us know how things develop.

    The Benefits Training Co: