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Esa backpayment savings query

starbuck
Member Posts: 160 Courageous
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.
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.
Comments
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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.
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The payments are disregarded for the duration of the esa claim as it was a government mistake.
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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.
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I'm wondering if it will affect my income support? Do I need to tell them about it and will my money be reduced?
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I would contact them. Ask them to clarify things.
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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?
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So the interest wouldn't be classed as income where my income support is concerned?
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No, definitely not. It's not classed as income because it's part of your savings. Fully confirmed in this link here.if you have savings of more than £6,000 then this will affect the amount of benefits you're entitled to.
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Thankyou so much!! I've been searching everywhere for info on this - I should have just asked on here first ☺
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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.
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If anyone has savings of up to £5,000, will your ESA be stopped.
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SOB said:If anyone has savings of up to £5,000, will your ESA be stopped.
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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!
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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!
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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/
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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.
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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.
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Sorry to doubt your advice - it's my anxiety just looking for new things to worry about! Thanks for the help ☺☺
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No problem.
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I meant was the information on the other site incorrect, not here ☺ This site is a fantastic resource ☺
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