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ESA and Working Tax Credits

Can anyone explain the impact of ESA ( Old style ) on working tax credits - I get the severe disability premium ? Thank you

Comments

  • calcotti
    calcotti Member Posts: 5,311 Disability Gamechanger
    Income based ESA is ignored as income for Tax Credits. If any of your ESA is contribution based that part is taxable income which therefore counts as income for Tax Credits.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • JonnycJonny
    JonnycJonny Member Posts: 19 Listener
    ESA would be contribution based - how long could I continue to receive WTC ?
  • calcotti
    calcotti Member Posts: 5,311 Disability Gamechanger
    edited February 2021
    If you are receiving (old style) contribution based ESA this must have been for a number of years and you are therefore clearly not working enough to meet the qualifying conditions for WTC on your own. Presumably therefore you have a partner and have a joint WTC award. As long as you jointly continue to meet the conditions for WTC you can continue to receive it but, as advised earlier, you need to include the contribution based ESA income in your calculation of your income for the year.
    Eventually you will be told that your WTC will end and you will be invited to claim UC.

    However, at least some of your ESA is income based because the SDP is an income based premium. An old ESA award can be a mix of contribution based and income based.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • JonnycJonny
    JonnycJonny Member Posts: 19 Listener
    Yes I have a joint award. 

    Thank you for the useful info.

    Best wishes
  • calcotti
    calcotti Member Posts: 5,311 Disability Gamechanger
    edited February 2021
    Yes I have a joint award. 

    Thank you for the useful info.

    Best wishes
    So have a look at your ESA award to see if it is partly contributions based or not. If the letters you receive are not clear (and they are notoriously badly written) you can always ring them for clarification (if you can get through).
    If it is partly contribution based I think you should get P60 from DWP each year confirming the taxable amount received (but I'm not sure about that)..
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.

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