ESA and private pension
How much private pension can a claimant have before ESA is reduced to credits only?
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Which ESA are you claiming? For Income Related ESA a pension income will reduce it £1 for £1 so it won’t financially be worth having a pension income.
If your ESA is contributions based or New style ESA then pension income of up to £85/ week is ignored. For every £1/week over that amount your ESA is reduced by 50p/week.
If it’s in a pension pot it is disregarded until you reach state pension age providing you don’t have an income from it.
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This is a question on behalf of a neighbour with MS who was claiming IR ESA (Support Group) with SDP. He has reached near retirement age and has opted to take his pension now. He was only in the pension scheme 20 years. However, this has wiped out ESA, leaving him with credits only. He's not good with money so I'm wondering whether he's getting as much as he ought.
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It’s impossible to advise without knowing how much pension they are receiving.
When exactly does he reach state pension age?
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He is 62 now. I'm not sure whether his state pension agecis 66 or 67.
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It's a shame he didn't get some expert advice before taking the pension income. When you said he is near to state pension age I didn't think you meant about 4 years. He can cancel the pension income BUT he would not be able to reclaim Income Related ESA and would need to claim Universal Credit instead.
As the ESA is continuing as NI credits only if he was in the Support Group for ESA then his UC will include the LCWRA element from the start of his claim but he would be worse off claiming UC than he would have been if his ESA hadn't completely stopped due to the SDP because this isn't payable when claiming UC.
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THanks @poppy123456 My friend has just completed his move to UC and gets his HB paid. But the NI credits are all that remain of ESA. I suppose his pension must be adequate.
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No problem. His pension will also be deducted in full from any UC entitlement so whether there's any entitlement will depend on circumstances and how much his pension is.
Housing benefit will also end 2 weeks after he submitted his claim for UC and help with the rent will be included with his UC, unless he's either living in supported or temporary housing and then housing benefit would continue.
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Thanks again. I think the HB change has gone through because he has to pay the housing association directly now. That's a worry because, as I said, he's not good with financial matters.
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He can request that UC pay the rent directly to landlord.
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Thanks. I'll pass on that info.
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This might sound daft but are NI Credits only considered an out-of-work benefit? Could my friend be subject to reassessment despite not receiving a penny of ESA?
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Very rarely because it's not a live claim as such, it's credits only. However, you said they've now claimed UC, if this is correct then what they need to do for this is put a message onto their journal and tell them they are in the Support Group for ESA and their UC should include the LCWRA element from the start of their claim. They do not need to provide a fit note.
That's assuming there's any entitlement to UC with the pension deduction.
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