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Thread: Receiving lump sum PHI(permanent health insurance) payment and claiming ESA

  1. #1
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    Receiving lump sum PHI(permanent health insurance) payment and claiming ESA

    Hi

    I am new to this forum and hope someone can answer my question.

    I have been on long term sick leave for several years and was receiving PHI from my employer so didn't claim any benefits. My employer's insurance company offered me a lump sum to settle my PHI claim which I accepted and as a result my employment contract ended.

    As I am no longer employed but have been paying national insurance I want to apply for contributions based ESA for the 12 months allowed. However I have read that if you receive a pension (including PHI) this is deducted from your ESA. The actual wording is as follows "

    In this regulation “permanent health insurance payment” means any periodical payment arranged by an employer under an insurance policy providing benefits in connection with physical or mental illness or disability, in relation to a former employee on the termination of that person’s employment."

    Does anyone know whether a lump sum payment counts as PHI in this sense? Although it's a one off payment I think it could be argued that the insurance company paid it in lieu of ongoing payments.

    Thanks
    Samui

  2. #2
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    The lump sum pension payment is treated as capital. Contribution Based ESA is only reduced by any weekly pension payment over £85 a week. So go ahead and claim the ESA.

  3. #3
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    Thanks for your replies. It sounds as though the money I received may be treated as capital. The insurance company have stated that the money is in "full and final settlement of all liability of this claim" and "is not an advance of benefit due".

    Can you clarify what the reference "vol 9 ch 54" refers to and where I can read the full details of this.

    Thank you so much.

  4. #4
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    Quote Originally Posted by davewhit View Post
    Its the book DM use to work out everything in this case ch54 deals with capital ...... for want of a better word its the fine print of benefits

    http://www.dwp.gov.uk/docs/dmgch52.pdf


    the way they have worded the letter is to make sure its not treated as advance payments ..they would be aware of how things need to be said to make sure you dont lose out with dwp



    section 52021 is what you need to read
    Dave, thanks very much that is just what I needed to know. At least I won't be failing at the first hurdle.

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