Employment and Support Allowance (ESA)
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Will an ESA recipient have their entitlement reduced if receiving a literary prize, grant or award?

Replies

  • Debbie_ScopeDebbie_Scope Member Posts: 947 Pioneering
    Hi @barrykernon,

    That's an interesting one. I need to know more in order to find you the right information including the value of the literary prize, grant or award.

    Best wishes
    Debbie


  • barrykernonbarrykernon Member Posts: 3 Listener
    Hi Debbie

    Thanks for your response. I am Hon Treasurer of the Society of Authors who make awards to many authors, some of whom are in receipt of State benefits. Typically these would be between £1000 and£ 5000 although a few are more than this.

    The prizes are not solicited by the authors themselves but arise because their publishers feel they are worthy of consideration. They are not taxable in these circumstances.

    I wondered whether the entitlement to ESA would be affected?

    Regards

    Barry

  • Debbie_ScopeDebbie_Scope Member Posts: 947 Pioneering
    Hi @barrykernon,

    Sorry for the delay coming back to you. It's very complex and different rules apply but i'll try to give you a brief overview. If you need more specific advice about how it would affect an individual's benefit you would be better off contacting the helpline to get some tailored advice. There are many complexities within the welfare benefits system and it's important to get specific advice where possible.

    With Income-related ESA you're allowed to have up to £6000 in savings without it affecting your entitlement to income-related ESA. If the recipient of the award already has savings and the award brings them over £6000 but under £16,000 they would be subject to tariff income. Every £250 (or part of £250) of capital you have between £6000 and £16,000 is assumed to provide you with an income of £1 a week. 

    Capital or Income?

    If the grants are paid as lump sums they will be considered capital, if they are paid in instalments or regular amounts this would be income.

    Capital
    The grant could be considered a charitable or voluntary payment, and its value could be disregarded; therefore no impact on entitlement to ir-ESA

    Income
    If the grants are paid as income but were considered charitable or voluntary payments, they could be disregarded; therefore no impact on entitlement to ir-ESA.

    This is as brief an overview as I could give. It's very difficult to give standard advice and I can't give definitive answers as it's such a complex area of law. There are big changes coming with Universal Credit and there's going to be a lot of confusion in the system so it is definitely advisable that the potential recipient of an award gets specific advice about how their benefits could be affected. This is something we can help with at the helpline so please do get in touch with us if you need some detailed advice.

    Best wishes
    Debbie
  • barrykernonbarrykernon Member Posts: 3 Listener
    Hi Debbie

    Thank you very much for this. It is really helpful

    Regards

    Barry Kernon

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