Esa backpayment savings query

starbuck

My husband had a backpayment earlier this year as he was put in the wrong esa group when changing from Incapacity Benefit years ago.
We put the payment into an isa so we can keep track of it and it doesn't get mixed up with our everyday money. Do we need to declare to dwp or tax credits the interest that it is earning? I can't find an answer to this online (probably because these backpayments are still fairly new). 
I don't want to ring the dwp unless I really have to as it sets off my anxiety really badly. 

wilko

Hello, the back payments are disregarded I think it’s for 12 months but after that the amount  plus interest is counted as savings so could can put you over the benefits threshold. I am sure one of our brain blessed members will correct me if I am wrong. 

starbuck

The payments are disregarded for the duration of the esa claim as it was a government mistake. 

poppy123456

starbuck said:

The payments are disregarded for the duration of the esa claim as it was a government mistake. 

Not exactly correct. Backdated payments from DWP for errors are only disregarded for the life of the ESA claim if the payment received was more than £5,000. If it's less than this they are disregarded for 52 weeks only.

For tax credits you only have declare interest on savings if that interest is more than £300 per year.

For DWP it's different, any interest you receive will be added to your savings which will increase it. For this the savings/capital rules apply.

starbuck

I'm wondering if it will affect my income support? Do I need to tell them about it and will my money be reduced? 

April2018mom

I would contact them. Ask them to clarify things. 

poppy123456

starbuck said:

I'm wondering if it will affect my income support? Do I need to tell them about it and will my money be reduced? 

Only if the interest means that your savings go over the amount you're allowed in savings,  Minus the backdated money which is disregarded for at least 52 weeks if the payment was less than £5,000.

starbuck

So the interest wouldn't be classed as income where my income support is concerned? 

poppy123456

No, definitely not. It's not classed as income because it's part of your savings. Fully confirmed in this link here.

https://www.entitledto.co.uk/help/what-counts-as-income

if you have savings of more than £6,000 then this will affect the amount of benefits you're entitled to.

starbuck

Thankyou so much!! I've been searching everywhere for info on this - I should have just asked on here first ☺

poppy123456

You're welcome. Don't forget that if the amount is less than £5,000 it is only disregarded for 1 year. After this time it is counted as savings and must be added to all of your savings.

SOB

If anyone has savings  of up to £5,000, will your ESA be stopped.

poppy123456

SOB said:

If anyone has savings  of up to £5,000, will your ESA be stopped.

If you're claiming Income related ESA then savings of more than £6,000 and your ESA will be affected £1 for every £250 over that amount. Savings of £16,000 and over and you won't be entitled to any means tested benefits.

SOB

So what if you have savings put aside for a rainy day, what then? I thought no one was aloud to have any savings at all!

poppy123456

SOB said:

So what if you have savings put aside for a rainy day, what then? I thought no one was aloud to have any savings at all!

Savings of less than £6,000 don't count. Please read my previous comment.

starbuck

This was one of the links I looked up while trying to find information. It says in the second paragraph that if you invest a compensation payment you must tell the dwp about the interest. Is the information on the site incorrrect? I'm really confused. My anxiety problems mean I can spend endless time worrying about things like this 😕

https://www.the-compensation-experts.co.uk/common-questions/will-compensation-claim-affect-benefits/

poppy123456

The advice i gave you yesterday is correct, i wouldn't give incorrect advice. That link is about compensation claims, your money was from a backdated payment from DWP error.

As previously advised. The money you received, if it's less than £5,000 then it's disregarded for 52 weeks. After this time, if your total savings are more than £6,000 you must report the changes and your means tested benefits will be affected. More than £16,000 and you won't be entitled to means tested benefits.

If the money you received was more than £5,000 then it's disregarded for the life of the ESA claim.

poppy123456

Please have another read of the link i posted above. Interest on savings is not classed as income because it's part of your savings.

starbuck

Sorry to doubt your advice - it's my anxiety just looking for new things to worry about! Thanks for the help ☺☺

poppy123456

No problem.

starbuck

I meant was the information on the other site incorrect, not here ☺ This site is a fantastic resource ☺

Tina66

Hi all, I know this was a few months ago, my brother in same position but after 52 weeks do we contact the DWP to tell them how much he has left (it's under 6k anyway)? Thanks 

poppy123456

Tina66 said:

Hi all, I know this was a few months ago, my brother in same position but after 52 weeks do we contact the DWP to tell them how much he has left (it's under 6k anyway)? Thanks 

Savings of less than £6,000 do not count for means tested benefits. Unless he has a total savings of more than this amount then there's no need to contact them.

Tina66

Hiya poppy, oh he has much less now but think the confusion we have is what they mean by 'added to capital already known after 52 weeks' so we assumed that means they'd write to him to see if he's saved more money ontop of what they gave him and already disclosed🤔

poppy123456

Total savings means everything he has, which includes money in all bank accounts and money at home.

Tina66

I understand that, but I'm trying to make sense of the fact that how do they know that he hasn't gone over the 6k for example saved what he has already been given by them last year backdated and what he has declared (he definitely has less than 6k) hence why I assumed that they would contact everyone to catch people out (which I think is a good idea). I'm happy to contact them on his behalf even though you say under 6k is OK but confused as to how they can be so sure nothing has changed and not contact him 🤔🙄

poppy123456

You're making it more complicated than it is. It's the claimants responsibility to report any changes in circumstances, not DWP's responsibility to contact you.

When he received the backdated money it would have been disregarded for 1 year. If the savings he already had were under £6,000 then they don't need to know about it. After the 12 months have passed if his total savings (including the backdated money) is less than the above amount you don't need to tell them.

If everyone rang to report every single £1 they saved then no one would ever be able to get through to them and the waiting times for them to answer are long enough as it is.

poppy123456

Just as an example for you. In 2013 i had backdated money from PIP and ESA. This gave me a total of more than £6,000 but was disregarded for 1 year. Fast forward 1 year and of course that money had decreased. I was never contacted by DWP and i never rang to report the savings because i had less than the lower amount.

Hope this helps.

Tina66

Thx Poppy, yeah that does help. If you should come across wht I originally asked here on the welcome part of the community post, I put that up at the same time as I wrote on here. I can't delete it but have asked moderators to do so as to avoid confusion. Appreciate all your help. Oh, BTW does it matter that my brother went from ESA IR to UC limited capability for work in the last year too (his award for support group went over to them due to change in something) or is that still OK? 😊😊😊

poppy123456

You're welcome. No, it doesn't make any difference because UC is still a means tested benefit.

I'm sure the admins will delete your other thread, if they haven't already.

Adrian_Scope

Hi @Tina66, I'm glad @poppy123456 was able to help you with this. Please let us know if you have any other queries

Tina66

Hi all again @poppy123456 and @Adrian_Scope , yes I was very pleased. I do have another question that is a worry. My brother as you know is on UC gets rent paid and lcwra as well as sla. He also gets esa contribution-based as his esa income related  support group was migrated over to them but still gets esa cb which is deducted from UC (phew!). His work capability assessment is in June. Our uncle passed away and he may give some money to us both. I know if it is over 16k (although we don't know if esa cb will carry on) everything will stop for my brother. Now, to explain to him if he gets say 18k and uses it sensibly to pay rent etc as he's currently doing what happens when in few months he reaches under 16k, what does he have to do regarding UC and will his LCWRA be reinstated if it before June? It is a pickle 😕🤔😄 thank you all so much 

Adrian_Scope

Hi @Tina66.
I'm really sorry to read about your uncle.
If your brother remains on CB ESA after his reassessment, he'll continue to receive this, even with the inheritance. But as you say, Universal Credit will stop.
When his savings are under 16k, UC will want evidence of how he's spent it to ensure he's not 'deprived himself of capital' and while he has between 6k and 16k, there'll be a reduction on his UC for savings. With regards to your question about LCWRA, if he continues to receive CB ESA, when he's eligible for UC again, this should just be transitioned. However, if he's found fit after his recent reassessment, I believe this complicates things.
I'm going to tag in @Joanne_Scope, just to see if anything she might be able to add.

Tina66

Hi, yes, because I find it confusing let alone him.

×I rang esa contribution-based but they said if his UC stops they they will stop although may pay the stamps, I don't understand.

×Yes please because that is the main thing about the LCWRA coming back. He doesn't travel either but if we were not getting inheritance we know he would be reassessed in June come what may but if before it would be great to have it reinstated then go through the huge stress of fit notes for him etc. 

×Re evidence of money, he would pay his rent and his normal things so I'm not sure what proof to give

Thank you for condolences 😔🙂

Joanne_Scope

Hi @Tina66,

I am not sure there is much that I can add to what @Adrian_Scope said.

New Style ESA (called contribution based before UC started) should not be affected by capital and if your brother does inherit some money then he should still get this.
This benefit is paid independently of the UC claim and should carry on if the UC stops.

When your brother's capital falls below £16,000 he may not need to go through the full application process again if it is less than 6 months since his last UC payment.
If he has an online account he may be able to go back on to his journal and reapply. It should be a simpler process.

As far as spending his capital goes, it is fine to use the money on normal living expenses such as rent. This should be easy to evidence if he is asked. Deprivation of capital is all about reasonable expenditure and intention. If the DWP think that the money was spent to take advantage of benefits then they may say that he has deprived himself of capital. I very much doubt they could say that about paying your rent. I recommend that you keep receipts for everything. You can also use bank statements to show how the money is spent.

Please let me know if any of this is confusing or if you have any further questions.

Tina66

Hi @Joanne_Scope

Thank you, it's a matter of waiting now to see what we/he gets.

I find this overwhelming let alone my brother. 

His ESA was his old claim, he was getting ESA IR after being wrongly put in ESA contribution-based for years, and when he went over to UC that IR stopped (to become Lcwra) and ESA contribution-based continued - we have never been told that it is new style as it is old claim so a bit confused and they told me when I rang thst if his UC award stops/change in circumstances, they said that his esa would stop too. 

🤔🤔🤔😩

Tina66

Is it definite that if it is less than 16k within 6 months he won't have to go through all that rigmarole only his normal reassessment is in June and I think inheritance is due Oct/Nov? Thank you 
🤔🙂 @Joanne_Scope

Joanne_Scope

Hi @Tina66,

It is hard to find anything definite in the UC rules! It just says that he "may" be able to reapply in a simpler way. 

I am a bit confused by what you are saying about his ESA claim. Income related ESA does not become the LCWRA. The LCWRA is the equivalent of the old ESA Support Group.

There was an issue in the early days of UC with people who were getting a top up of Income Related ESA including a Severe Disability Premium, being wrongly moved on to UC and losing the Income Related part of their benefit. Did this happen to your brother? 

Tina66

Hi, what happened was for years he was in the esa support group indefinitely but instead of getting esa ir he was getting esa contribution-based. Then they changed him to esa ir, and he received a small backdated payment too. He then had to move address and this triggered a move to UC. His esa ir component was stopped but his award was migrated over to UC so that he could then get LCWRA which is what he currently has.
He has been kept on esa contribution-based  (deducted from UC), however, they say to me one minute if he won 2million pounds he could still get esa contribution-based but at same time they say if his UC LCWRA stops eg if my brother didn't pass next work capability assessment or got better, his esa contribution-based stops too, and so if my brother goes over 16k that's where the confusion lies as the award will also stop due to inheritance but his illness is still very much the same. Sorry, hope that makes sense 🤔 

Joanne_Scope

  Hi,

Ok, I understand now. Both the things you have been told are correct. 

He can have any amount of capital and still get ESA based on contributions, as long as he continues to meet the criteria.

If he has a new Work Capability Assessment, and he is not awarded enough points, he would lose his Conts Based ESA and the LCWRA. 

The LCWRA is part of UC, and UC would stop if he has more than £16,000. The Conts Based ESA should continue. 

When UC is calculated they look at the person's maximum entitlement, including all the different elements such as housing and LCWRA. They work out a total and then deduct income and income from capital etc. to work out how much to pay.

Your brother's maximum total would not change, his LCWRA would still be part of that maximum entitlement, but the amount he receives would alter. It would stop altogether while he has over £16,000 and then change as his income from capital changes.

The LCWRA would only be taken out of the calculation if he fails his next ESA assessment.

I hope that is not too confusing!

Tina66

Hello, thank you, we're just going to wait and see now and hope if we do get over 16k that when he does go under, (BEFORE what would have been his next assessment date in June had he not stopped his UC theoretically), that the award will be reinstated. That's the biggest concern 😕😕 if we/he get less than 16k than better as he can just get to his normal assessment date. I'll let you know and thank you 👍 again 😊😊😊

Joanne_Scope

You are very welcome and I hope it all works out ok.

We are here if you have any further questions:)

Tina66

🤞😁😁😁😊

Tina66

Hi all, this is for @poppy123456 hope you're well? Stupid question alert re my brothers 52 week disregard of esa backdated thst you explained few weeks back - when the 52 weeks are up will he have to pay back any housing or council tax? Even though his savings were less than 6k when he got backdated payment and are much less now someone has scared him and said he will have to pay housing and council tax but I said that that doesn't make sense as he has been under 6k from before and to present day. Apologies, I believe I'm right but wanted it written down to show my brother 😌

poppy123456

I've got a stomach bug today so not feeling too good! Sorry for the delay in replying.

You are absolutely correct, he won't have to pay anything back to his local council for anything. Who ever told you that, is incorrect and i hope you tell them too.

Chloe_Scope

Thanks for stepping in @poppy123456, hope you are feeling a little better today!

Tina66

Thank you @poppy123456 I wish you Better 🙏 

poppy123456

@Chloe_Scope @Tina66 thanks for the well wishes. My stomach bug continues

Tomorrow is house moving day and i'm dreading it. I can't wait for Sunday, when i'll wake up in my new home and can then start unpacking at my own pace. At least the weather is going to be kind!

I will have very limited internet access from tomorrow until Tuesday, but i will return in the middle of  next week.

Tina66

Good luck with it all, hope stomach bug goes ASAP 👍🤞

Tina66

OK, this is the last time I'm going to do this re this subject of my brothers 52 week disregard backpay (really hope) and I'm a bit embarrassed because lovely @poppy123456 (hope moving home and stomach going OK) has already told me all about the 6k savings rule but my brother wants to ask now, on his award letter it says, 'will not add this amount to the savings you have already told us about until after 52 weeks' so whilst I explained everything to him that the onus would be on him to contact DWP if he ever went above 6k, as Poppy says, he thinks that after 52 weeks they'll add it all up (again under 6k) and will bombard him with forms to fill in which he really struggles with. I can see the slight confusion there because of that sentence as even I'm a bit wondering.... 🤔 Again, I'm so sorry, it's the constant reassurance thing. 

poppy123456

Providing he has under £6,000 total in savings then he doesn’t need to do anything and no there won’t be any forms to fill in. Best thing you can do is to show him this thread and hopefully he will understand.

Stomach is better, thanks. House move is complete and my new home is beautiful. Very tiring week and I’m glad it’s over as now I can relax. Limited internet and no TV until Tuesday 🙄 thanks for asking! 

Tina66

Moving is so so stressful especially if you're unwell so I am glad that you're settled although not having tv or limited internet is a pain but only few days till you do. I'm going to print out this thread I think if I can as I don't want to repeat myself anymore and at least it's there in black and white for him 🙄😁 thank you again for replying 👍🙂

Adrian_Scope

Hi @Tina66. I'm really glad Poppy was able to help you with your brother's additional queries. Has it managed to put his mind at ease a little bit?
@poppy123456, thank you for your help here! I hope your first few nights in your new home have been good. Is it starting to feel like home yet? 

Tina66

Hi @Adrian_Scope, Poppy has been great, I really appreciate it especially with being so busy and unwell. I did want to ask further but felt embarrassed but now as you have messaged, my brother does understand about what poppy has said re 6k and the backdated payment FINALLY but it's this sentence 'we will not add this amount to the savings you have already told us about until after 52 weeks' - just doesnt make sense, if it's down to my brother to notify them. I understand if you're rolling your eyes because I may be repeating myself but it's just thst sentence. Also because my brother gets a lot of panic attacks it makes me stressed too. I think once that actual sentence is broken down I can show him that too and print it all out 🙏🙏🙏 👌👌🤔

poppy123456

@Tina66

When he had the backdated money the reason it’s nit added to any existing savings at the time is because it’s completely disregarded for 52 weeks. After the 52 weeks all of his savings are counted. Hope this helps put both your minds at rest. 

poppy123456

@Adrian_Scope thank you for asking! Yes, it’s already starting to feel like home. Thankfully I had a lot of help from friends and family and all the boxes are now unpacked. 😱 just a few more things to sort out along with my internet being reconnected tomorrow morning and I’m all set. 

Tina66

Oh I understand that Poppy 😊(and amazingly so does he!) it's just the 'after 52 weeks it's counted/added to savings' part as in how can they possibly know what my brother has left now? We know of course but he could have saved more money or won money (if only he could). He wants me to ring DWP but I don't have time and it's hard to explain. It's hard for me poppy, my brother needs constant reassurance and it's so exhausting and if he doesn't understand something it's a desperation to know, dissect, even if it doesn't actually effect him - he is like this about a lot of things in life. He's obsessed with this particular sentence. I'm so sorry 🙏 

poppy123456

No need to be sorry. I’m sorry it’s difficult for you, has your brother had a needs assessment? You or he can refer him for this from his local council. Someone will come out and assess him to see what help could be given. 

DWP won’t know if his savings exceed the lower limit which is why is his responsibility to contact them after the 52 weeks if he did have over that amount. As he doesn’t then there’s no need to contact them. 

Tina66

Hi, I get it, I'll explain it. 👍Thank you. No, I've never heard of a needs assessment at all. Is it something I Google with my local council? He gets PIP but that is a payment. ☺️

Chloe_Scope

Hi @Tina66, here's the link to be able to apply for a needs assessment.

Tina66

Thank you so much, Chloe 😊😊👍

poppy123456

Chloe_Scope said:

Hi @Tina66, here's the link to be able to apply for a needs assessment.

Thanks @Chloe_Scope! I completely forgot to post the link once my internet was connected and couldn't add the link while only having access with my phone.

Chloe_Scope

No problem at all @poppy123456! I hope you are settling into your new house.

starbuck

Do I have to declare this backpayment to the ema people? I've just realised our son's ema renewed automatically this year and I didn't think about the backpayment. They ask you to declare all income and ours hasn't changed. 
Is the esa payment classed as income? i'm worrying all over again now! 

poppy123456

starbuck said:

Do I have to declare this backpayment to the ema people? I've just realised our son's ema renewed automatically this year and I didn't think about the backpayment. They ask you to declare all income and ours hasn't changed. 
Is the esa payment classed as income? i'm worrying all over again now! 

No because it's not counted as savings for anything at all.

starbuck

Thankyou 😊

starbuck

It says on the ema form to report income from savings interest so I guess any interest the lump sum generates will have to be declared? 

poppy123456

The interest on that will be extremely low. What they mean by interest on savings is more like 100's of pounds interest.

starbuck

Ah ok 😊