Employment and Support Allowance (ESA)
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ESA and savings - how long will deductions continue

Hi,

I am currently receiving Income based ESA and each week £20 is deducted because of the savings I have. Will this deduction continue for the life of the claim? Someone mentioned it would be take almost 5 years before I will get the full amount of benefit. I am managing okay on the money I have and feel like I am lucky to have a warm home and food etc. It is just I would like to know more about how my income might change.
Thank you.

Replies

  • janer1967janer1967 Member Posts: 9,123 Disability Gamechanger
    Hi am not too sure of the answer but would expect once your savings go below the threshold you will inform them and deductions will stop 

    One of our benefits experts will be able to help you more 
  • OverlyAnxiousOverlyAnxious Member Posts: 1,256 Disability Gamechanger
    You lose £1 per week for every £250 over the £6000 threshold.  There's no time limit on that, you just have to tell them if your savings drop. 

    Be aware you can't just give the money away either, as it's classed as deprivation of capital in order to receive a means tested benefit.
  • RoszakRoszak Member Posts: 4 Listener
    Thank you both :-)
    I am on old style ESA and the paperwork the DWP sent me says £4 for every £250. I have heard of deprivation of capital and I wont be spending money to get money. I need to get a new car and would normally get a bank loan but this time the insurance payout I got means I can pay cash, is that allowed?
  • woodbinewoodbine Member Posts: 3,722 Disability Gamechanger
    As above it should be £1 per £250 above £6,000 yes you can buy a car, as long as it's not a rolls royce make sure you keep all the receipts and then if your savings go below £6,000 send them a copy of your bank statements.
    my advice is given freely and is correct to the best of my knowledge.
  • poppy123456poppy123456 Member Posts: 22,218 Disability Gamechanger
    Hi,

    For ESA it's £1 per week for every £250. For Universal Credit it's £4.35 per month for every £250 because UC is a monthly benefit.

    You can buy a new car but the deprivation of capital rules will apply here too. This means that if you buy the most expensive car there could be issues. Although there's no specific definition of deprivation of capital when buying things.
    Community champion and 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.
  • RoszakRoszak Member Posts: 4 Listener
    Sorry about me remembering the wrong amount, I checked again you are right. Thank you for posting the right amount. 
    Thank you for your advice too, If I was not receiving Income Based ESA I would be using my savings to buy a good second hand car so I think I will just go ahead with that. I will send the DWP the receipt etc and just see what happens. 

    If the DWP say it is deprivation of capital then I assume the deductions will continue on my ESA. The thing is though if that happens and the money is spent then I cant spend it on something else I need. It is hard for me to explain but this would mean my amount of perceived savings could remain and the deductions continue. Does anyone know is the deductions would continue for the life of the claim or expire after say five years?

    Also does anyone know what happens to the benefits of people who have been self shielding because of Covid, unable to shop for bigger items and have increased amount of savings because this?
  • poppy123456poppy123456 Member Posts: 22,218 Disability Gamechanger
    You're welcome. It's very unlikely that buying a used car will be deprivation of capital.

    Savings rule applies to everyone if they are claiming any means tested benefits, even if you've been shielding because of Covid.
    Community champion and 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.
  • RoszakRoszak Member Posts: 4 Listener
    Thank you again I will come back and let you know how things turn out.

    I agree with you about the rules applying to everyone, the point I was trying to make is that the DWP needs to account of how  and why people end up saving over the £6000 limit. I mean in the context of the Lockdowns and Covid etc.
    Have a good evening.
  • GarzaGarza Member Posts: 117 Pioneering
    it would be so much easier for me to be on the new style esa, such a shame that cant happen, it would mean that I could move in with my partner which we cannot do under old style as I would lose the benefit, from what i can tell the threshold for savings seem better too although I am not sure on this 


  • GarzaGarza Member Posts: 117 Pioneering
    Roszak said:
    Thank you again I will come back and let you know how things turn out.

    I agree with you about the rules applying to everyone, the point I was trying to make is that the DWP needs to account of how  and why people end up saving over the £6000 limit. I mean in the context of the Lockdowns and Covid etc.
    Have a good evening.
    I agree that the savings limits seems a bit arbitrary and also dont feel you should be penalised (sp) for being able to save money on benifts either, I also agree that the limits should be revisited due to lockdown, shielding etc as it is bound to make some people go over because they are unable to spend money on things that they normally would do 
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