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Thread: effect of pension lump sum on contribution based ESA; also variable permitted work

  1. #1
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    Oct 2012
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    effect of pension lump sum on contribution based ESA; also variable permitted work

    Hi

    I'd really appreciate some advice about the effect of my medical retirement NHS pension on my ESA which is contributions based. I am in the support group due to a number of chronic inter-related medical conditions.

    As I understand it, above a threshold of £85, any weekly income from my pension will mean my ESA is reduced; my income is around £90 a week, so I believe the reduction will be half the difference between £90 and £85 i.e. £2.50 a week.

    (It took me ages to find that out on the net!)

    But I am still unclear as to what effect the lump sum I took will have. I decided to take a large sum as I needed to pay off some of our mortgage, buy a car (I have mobility issues and am on higher rate DLA) and have our bathroom improved to help with my medical needs.

    So my current savings are below the £16000 threshold which I understand would exempt me from any ESA.

    To further complicate matters, in order to (a) get me more active and (b) help with finances, I am working a few hours a week permitted work. This is variable and only during University term time (i.e. 22 weeks a year). Will my weekly income be adjusted to take this into consideration? Taken over the year as a whole, I am well under the £97.50 threshold but if this semester alone were to be looked at it would take me over the threshold (this is the longest of the 3 academic terms, being 11 out of the 22 weeks). I don't want to reduce my hours but also don't want to lose my ESA.

    Any advice/clarification would be very much appreciated! I don't like having to rely on benefits but as I'm sure many people on these forums know all too well, sometimes needs must!

  2. #2
    davewhit
    Guest
    Quote Originally Posted by Foxy13 View Post
    Hi

    I'd really appreciate some advice about the effect of my medical retirement NHS pension on my ESA which is contributions based. I am in the support group due to a number of chronic inter-related medical conditions.

    As I understand it, above a threshold of £85, any weekly income from my pension will mean my ESA is reduced; my income is around £90 a week, so I believe the reduction will be half the difference between £90 and £85 i.e. £2.50 a week.

    (It took me ages to find that out on the net!)

    But I am still unclear as to what effect the lump sum I took will have. I decided to take a large sum as I needed to pay off some of our mortgage, buy a car (I have mobility issues and am on higher rate DLA) and have our bathroom improved to help with my medical needs.

    So my current savings are below the £16000 threshold which I understand would exempt me from any ESA.

    To further complicate matters, in order to (a) get me more active and (b) help with finances, I am working a few hours a week permitted work. This is variable and only during University term time (i.e. 22 weeks a year). Will my weekly income be adjusted to take this into consideration? Taken over the year as a whole, I am well under the £97.50 threshold but if this semester alone were to be looked at it would take me over the threshold (this is the longest of the 3 academic terms, being 11 out of the 22 weeks). I don't want to reduce my hours but also don't want to lose my ESA.

    Any advice/clarification would be very much appreciated! I don't like having to rely on benefits but as I'm sure many people on these forums know all too well, sometimes needs must!
    get expert advise and also make sure the dwp have full details of the work your doing and are happy with you working get it in writing

  3. #3
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    Oct 2012
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    Thanks for advice.Have spoken to advisor, have OK for permitted work. Not clear advice on pension though. Any ideas re lump sum?

  4. #4
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    Quote Originally Posted by Foxy13 View Post
    Hi

    I'd really appreciate some advice about the effect of my medical retirement NHS pension on my ESA which is contributions based. I am in the support group due to a number of chronic inter-related medical conditions.

    As I understand it, above a threshold of £85, any weekly income from my pension will mean my ESA is reduced; my income is around £90 a week, so I believe the reduction will be half the difference between £90 and £85 i.e. £2.50 a week.

    (It took me ages to find that out on the net!)

    But I am still unclear as to what effect the lump sum I took will have. I decided to take a large sum as I needed to pay off some of our mortgage, buy a car (I have mobility issues and am on higher rate DLA) and have our bathroom improved to help with my medical needs.

    So my current savings are below the £16000 threshold which I understand would exempt me from any ESA.

    To further complicate matters, in order to (a) get me more active and (b) help with finances, I am working a few hours a week permitted work. This is variable and only during University term time (i.e. 22 weeks a year). Will my weekly income be adjusted to take this into consideration? Taken over the year as a whole, I am well under the £97.50 threshold but if this semester alone were to be looked at it would take me over the threshold (this is the longest of the 3 academic terms, being 11 out of the 22 weeks). I don't want to reduce my hours but also don't want to lose my ESA.

    Any advice/clarification would be very much appreciated! I don't like having to rely on benefits but as I'm sure many people on these forums know all too well, sometimes needs must!
    Contribution Based ESA is not affected by capital/savings or the NHS pension lump sum. Permitted Work allows you to earn up to £99.50 a week nett and still get your Contribution Based ESA. This is on top of the NHS pensioon which is taken in to account under separate ESA rules.

  5. #5
    New Member
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    Quote Originally Posted by Duncan View Post
    Contribution Based ESA is not affected by capital/savings or the NHS pension lump sum. Permitted Work allows you to earn up to £99.50 a week nett and still get your Contribution Based ESA. This is on top of the NHS pensioon which is taken in to account under separate ESA rules.
    Many thanks Duncan. I had in fact sought expert advice as previously suggested and found out that unlike with IR(income related) ESA, contribution based ESA isn't affected by lump sum. I have confirmed however that Contributory ESA is reduced by half of any occupational pension I receive over £85 a week, although actually, when I rechecked my pension details I found that I am in fact getting under the weekly threshold as I only get £83.

    Looking at the regulations on the Permitted work, if it is seasonal, I understands that adjustments are made to take this into account. Apparently if a claimant’s regular pattern of work varies, ie they do not do the same number of hours every week, and there is a recognisable cycle of work, their weekly income over that cycle is averaged. If there is no recognisable cycle of work, or the amount of the claimant’s income fluctuates, then the weekly income is averaged using the last
    • two payments if those payments are one month or more apart
    • four payments if the last two payments are less than one month apart
    Any periods when the claimant does not do any work should be included if they are part of their normal cycle of work.

    I've been told that the threshold is £97.50 but it wasn't made clear that this was net, I had to search hard to find that tax and NI (and childcare costs if relevant) are deducted first.

    It's all very complex and hard to fathom and very anixety provoking when you are struggling with being ill!

    Thanks again for your help.

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