Employment and Support Allowance (ESA)
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Will a loan affect my income based employment Support allowance?

RSISolutionsRSISolutions Member Posts: 113 Courageous
I am in receipt of income based employment Support allowance and I don't have to pay council tax because of my low income and lack of savings. My savings are less than £6000. If I receive a loan secured on the equity in my house will this affect my benefits?

1. If it takes me over the £6000 limit
2. If I'm still under the £6000 limit


  • mikehughescqmikehughescq Member Posts: 6,588 Disability Gamechanger
    You get CTR because you get means-tested ESA. You get the latter because if your income and capital. 2 answers to your question. You won’t like either.

    1 - equity release is effectively taking out a loan you have no means to repay, Before you do so you need independent financial advice. 

    2 - if capital remains below £6k then there’s no issue. After that depends on how much we’re talking and what the purpose is.
  • BenefitsTrainingCoBenefitsTrainingCo Member Posts: 2,692 Pioneering
    The principle is that savings above £6000 affect means tested benefits like income related ESA. But the rules can be complicated and it may be that there are other issues to consider here. How much do you expect to receive and what will you do with the money?
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  • RSISolutionsRSISolutions Member Posts: 113 Courageous
    edited September 2018
    Hi David. Loan will be paid in monthly Installments to the same value as my monthly mortgage payments and will be used to pay my mortgage. The total value of the loan is below £6000. No need to pay the loan back until I sell the house and the equity is released. My capital will remain under 6k during the period. 
  • poppy123456poppy123456 Member Posts: 22,218 Disability Gamechanger
    Under £6,000 doesn't affect means tested benefits providing the loan doesn't take your savings over £6,000.
    Proud winner of the 2019 empowering others award. This award was given for supporting disabled people and their families for the benefit advice I have given to members here on the community.
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