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ESA deductions.

Mara_1 Community member Posts: 4 Listener
Hi I am new to this group and really need some advice regarding capital and ESA.I know the main rules but need more detailed help around disregard rules for ESA.We are having £26 a week stopped from our benefit at the moment.We have obtained a sum of money from my husbands pension purely for the purpose of doing essential home repairs.He has not reached qualifying age. We have been struggling on benefits for so long and our house is in disrepair and needs quite a lot of work.There are two disabled people in the house and I myself have been diagnosed with fibromalgia.None of the repairs needed are covered by a grant as our council only gives loans now with added interest on.Now we have the money to start repairs they are saying it is capital and  taking benefits.I know the DM guidelines say some money for repairs should be disregarded.The DWP man I spoke to said there is no such ruling..sorry this is so long,any help would be appreciated.


  • JennysDad
    JennysDad Community member Posts: 2,298 Disability Gamechanger
    Just saying hello @Mara_1 and welcome to the community. Sorry we've not got back to you earlier, but some of our knowledgeable members will be in touch with you in due course.
    Warmest best wishes
  • Mara_1
    Mara_1 Community member Posts: 4 Listener
    @JennysDad thank you very much.
  • Pippa_Alumni
    Pippa_Alumni Scope alumni Posts: 5,790 Disability Gamechanger
    Hi @Mara_1, welcome to the community!

    I wonder if @Gill_Scope could offer any guidance here?
  • Mara_1
    Mara_1 Community member Posts: 4 Listener
  • [Deleted User]
    [Deleted User] Posts: 273 Pioneering
    Hi Mara_1

    This is a difficult scenario for sure.

    Although there are Regulations that specifically give people the right to sell property and have their capital ignored  for benefit purposes whilst it is earmarked to purchase other property or to do essential repairs on a property that they haven't moved into yet, to make the house habitable and able to accommodate a disability, this doesn't apply where you have obtained funds from a pension plan early and used that money to do such repairs or alterations.

    There is a risk attached to taking money out of a pension pot early, if you are having to claim income-related benefits. This risk is that the DWP Decision Maker will apply "tariff income" rules to your benefit claim. These say that if you "deliberately" use savings or capital in order to obtain benefit, or more benefit, then the DWP can assume that you still have the money. They can assume an income from the savings as if you still have them, and this is £1 per week for every £250 that you have used over £6000. 

    Essentially, the DWP decision maker would have to prove that you have used the money in this way in order to obtain benefits, whilst in order to challenge their decision, you would have to show that you didn't do the repairs or alterations to get more benefit income, but in fact did them in order to preserve your home in a habitable state. Also it can be useful to argue that even if you had known about the tariff income rules, you would still have done the alterations because they were necessary. 

    It will be relatively easy to challenge this decision successfully if you needed the alterations for reasons of disability. So having a new kitchen installed to be more modern, is less likely to avoid tariff income rules, whereas alterations to a kitchen to provide adaptions needed because of disability would. 

    You should not be affected by the tariff income rule if you were unaware of the it when you took the money out of the pension pot and used it for the house alterations. 

    It may be a good idea to try to find a benefits caseworker in your locality to help you to challenge the recent decision by making this argument in a mandatory reconsideration and if necessary an appeal against the decision to deduct "tariff income" from your benefit entitlement.
    Paragraph 115 and paragraph 118
    Schedule 9 gives a list of 58 exceptions to the capital rules, but the precise circumstances you describe aren't included, unfortunately. 

    Please let us know if you have trouble finding someone to help you with this. 

    Best wishes



  • SethLaa
    SethLaa Community member Posts: 111 Courageous
    I was led to believe that when claiming ESA Contribution Based (Support Group) I would not be penalised for having savings of more than £6000 however, when I started claiming 12 months ago I was stopped a mahoosive £1 per week (ouch lol) for having £6250 in savings (I wish I had that much now haha) so cannot work out how my benefits are paid, end of moan 
  • Mara_1
    Mara_1 Community member Posts: 4 Listener
    @Gill_Scope,thank you for your reply and all the information.The link you sent is where I got my info from.I had hoped We would be covered under the capital disregard which said any sum acquired specifically for home repairs.I also rang the DWP before taking money and was adviced on the phone money for essential home repairs would be allowed and now they have decided differently.So we took the money to do repairs after also consulting a financial Advisor to get his agreement to transfer on the reasons above. I therefore didnt realize this would happen.I am struggling to find a benefits caseworker in my area,any help with this would be appreciated. The house needs ,roof, and strucural repairs to rotten eaves and broken guttering causing other problems. 
    Thank you
  • [Deleted User]
    [Deleted User] Posts: 273 Pioneering
    Hello there. I think that the DWP have made a mistake or else you have. Either you have means-tested benefit or not. It is sometimes the case that you have contributory benefit and this is topped up with means-tested benefit. 

    Sometimes the DWP will assume that you still have savings when you don't - these are the notional capital rules which lead to the tariff income rules, as outlined above. The DWP would say that you have used the savings when you didn't need to, in order to get more benefit, and then they would take £1 per week for every £250 over £6000, on the basis that they assume that you have capital
    that you no linger have.


    Hi there Mara, I hoped that you are quite well.  I would like to know where you pay council tax. I will search for a local adviser or else offer a phone appointment with one of the specialist benefits and finance advisers here. 

    Yours sincerely

    Scope Hwlpline
    Tel: 0808 800 3333

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