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ESA mental health & money problems

gottler Member Posts: 3 Listener
Hi all, New here and not sure if it's the right place to ask my question.
I'm on ESA support group and was told I wouldn't have to have another assessment for 2 years which was good as I have mental health and physical problems.
I'm recently divorced and have a pension sharing order waiting to go to court. It's taken 13 years to get to this stage and hopefully will be sorted in the next 3 months.
Over this time my family have helped support my mental health and my money worries.
Now I'm getting nearer to being able to access pension pot (will be under £10,000 as ex changed to an annuity when he found out I could take a share) I'm really worried how it will affect my benefits if I pay back what I have borrowed over the years.
Is there somewhere I can find out as I'm really stressing and anxiety levels are making me quite poorly.
I get ESA and housing benefit and help towards my council tax.
Ex took 25% tax free sum when he bought annuity so I will be paying tax on all of my share.
Sorry this is so long and thanks for reading and any advice you might be able to give.
I am 62 so won't get my state pension until I'm 66


  • [Deleted User]
    [Deleted User] Posts: 1,748 Listener
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  • gottler
    gottler Member Posts: 3 Listener
    Thank you for the advice Victoriad .. was asking as I have no ideas at all what to do. I did try to ask a IFA but as the pot is so small there was no interest.
    Will try Which Money .. thank you
  • [Deleted User]
    [Deleted User] Posts: 273 Pioneering
    Hi gottler

    I completely agree that we can't offer independent financial advice on this website.  Aside from financial advice though, which would be about looking at your situation in the round, and then at your options, I can offer a few facts about the effect on benefits of a capital sum in your possession. 

    1 If you have under £6000 altogether, including your current account, this has no effect on income-related benefits.  Capital or saving between £6000 and £15,999 give rise to deductions form income-related benefits at the rate of £1 for every £250 you have over £6000. If you have £16,000 or more, you cannot currently claim income-related ESA.

    2 Housing benefit is an income-related benefit. ESA can be contributory only or it can be income-related. If it is over £110.75per week, at least part of it is definitely income-related. 

    3 It sounds as if you will have a lump sum from this pension, rather than an income - please let us know if you will get an income, as there is another set of rules that you need to know in this case. 

    4 You mention, I think, paying off debts that have accrued over several years. . If you are on income-related benefits and your total savings are less than a few hundred euros, no-on will question this. As soon as you have at least £6000, though, you may need to show when you received the rest of your capital, and what you did with it. This is because of "deliberate disposal of capital" rules .Essentially, if the DWP think that you have had access to funds that might have meant that you could stop claiming income-related benefits, but you chose to get rid of those funds so that you could claim income-related benefit again or more income-related benefits, then the DWP can assume that you still have the funds - and can deduct money from your income-related ESA as at 1 above. The DWP have to prove why they think this, but as you can imagine, there are often disputes about this. 

    I hope that these explanations might help a bit, though I think it is likely that they will throw up more questions, before you get the answers that you need.Good luck with your research.  

    Best wishes

    Benefits and Finance Information Specialist

  • gottler
    gottler Member Posts: 3 Listener
    edited June 2018
    Thank you Gill
    very helpful information
    The money will be a lump sum as i chose to take a drawdown pension rather than an annuity, mostly because I wanted to clear lots of debts .. to family members who have supported me since i left my marriage.
    I left the marriage with nothing other than my clothes and my dog (the faithful one!).
    I have today tried to get in touch with JCP to advise them of my forthcoming change in circumstances. I have been in a queue for 1 hour and 14 minutes and they will be closing shortly.
    Oh well tomorrow I'll try again
    thanks again for your help
  • [Deleted User]
    [Deleted User] Posts: 273 Pioneering
    Hello gottler

    Just a footnote. Paying off debts, including to family and friends who helped when times were difficult can be interpreted as "deliberately disposing of capital " (see 4 above). This isn' t the case, if  the debts that had to be paid (for example if there was an outright County Court Judgement), or, of course if your total capital is and always has been less than £6000. Again, it may come down to "Did the person pay these debts to get some or more benefit?" and there is case law about this. In case of need, I'd suggest that you might contact a local benefits specialist if possible to help you to resolve any dispute with DWP about this. 

    Best wishes



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