Advice on claiming dependants pension while on income related ESA?

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Jo2018
Jo2018 Online Community Member Posts: 2 Listener
edited March 2018 in Employment and Support Allowance (ESA)
My son is in the supported group of income related ESA. 
He has recently been award a dependants pension of £5583.60 per year from my late husbands
private pension.

Can anybody let me know if it is worth while claiming this pension as its nearly (£20per week short) the same amount as his ESA, which may be affected by receiving the pension. I think he may have to pay NI and tax on the pension payments so he may be worse off.

Cab anybody advise please 

Comments

  • CockneyRebel
    CockneyRebel Online Community Member Posts: 5,188 Championing
    Hi Jo2018 and welcome

    You should get f2f financial advice from CAB or similar to explore your sons options.
    I belive that his ESA IR will be reduced £ for £ by the pension amount if it is paid weekly/monthly as income. If paid as a lump sum annually, then it may be seen as capital or savings which treated differently

    CR .
  • Jo2018
    Jo2018 Online Community Member Posts: 2 Listener
    Thank you for the advice. 
    I will look into this further, but do you know if this could be year on year as a yearly payment, or I could only take the first £5999, and then the 2nd yearly payment would be treated different??
  • Sam_Alumni
    Sam_Alumni Scope alumni Posts: 7,602 Championing
    @BenefitsTrainingCo can you help?
  • BenefitsTrainingCo
    BenefitsTrainingCo Online Community Member Posts: 2,621 Trailblazing
    Hi Jo2018

    Income related ESA is indeed affected by a private pension. The private pension would count as income and so your son's ESA would be much reduced and could even stop.

    Based on what you've said if your son has no other income that counts for income related ESA then he is likely to be receiving ESA of £125.55 per week. It may be more if he also receives Personal Independence Payment. The weekly amount of the pension would be £107.38 and this would be used to reduce his income related ESA to a likely £18.17 per week.

    In these circumstances your son would be no better nor worse off for receiving the pension. He might like to consider deferring the pension or receiving some of it as a lump sum amount bearing in mind the upper capital limit for income related ESA is £16,000 meaning he would not be eligible for the benefit if a lump sum payment took his savings above this amount.

    I hope this helps
    David
  • wilko
    wilko Online Community Member Posts: 2,438 Championing
    It's a difficult one this go and get some independent advice, there are many more aproching this situation and wondering what to do having worked all the their lives paid into private or works pension or have endowment polices due to mature are all going to lose their benefits  because they where fugal and saved.

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