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Thread: Can anyone advise me about a claim for Severe Disability Premium please.

  1. #11
    Yesterday I received cheque for £8328.95 for back pay from 2016 when I didn't know anything about Severe Disability Premium
    today I received a letter saying :-

    We are writing to tell you that the contributory element of ESA can count as taxable income
    Because of changes in the allowance paid to you, the revised figures for taxation purposes are:

    Period ending
    Tax year 2017/18

    Total allowance paid £9630.30
    Taxable allowance £8972.84


    Before the repayment of Severe disability premium I got £249.94 ESA a fortnight and £591.90 PIP a month

    Receiving a letter like this on a Saturday has sent my brain into full blown panic attack mode and I've managed to convince myself that I'm going to get a huge tax bill.
    following a bad stroke 10 years ago I worry about everything and something like this that I don't even understand means I wont sleep now until I know what's going on.
    Before the huge cheque I have never pain any income tax

    Can anyone make sense of this or explain what the letter means

    I've just thought of something. About 2 months ago I wrote to tell the DWP about two pensions I have. One pays £15.00 a month and the other pays 27.00 a YEAR.
    Could the above figures and letter be about the two pensions, neither of them will put me over the current income tax threshold?
    Apologies for my paranoia its because I'm terrified of the DWP.
    Last edited by Rhodd; 08-17-2019 at 09:21 PM.

  2. #12
    Senior Member nukecad's Avatar
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    It's simply updating your benefit statement for your tax record purposes,and is nothing to worry about.
    (You'll possibly/probably get another one for tax year 2018/2019).

    CB ESA is a taxable benefit and you should get a yearly tax statement from the DWP, a P60U.
    They have to provide this just in case you also have some other source of taxable income.

    Although the Premiums are an IR ESA top-up and are not taxable they have to revise your tax statement to say that you have now been paid more benefit for that year, (some of the backpay you got), and that is all that letter is telling you.

    They are simply saying that for the whole of that tax year year you have now been paid a total of £9630.30 in ESA and premiums - of which £8972.84 is counted as taxable income.

    In 2017/2018 as a single person you were allowed to have a taxable income of £11,500 before you actually had to pay any tax.

    £8972.84 is well below that and so there is still no tax to pay.

    Unless you have other taxable income, say a private pension, then benefits alone will never reach your personal tax allowance.

    Just to be clear; income from PIP is not taxable.
    Last edited by nukecad; 08-17-2019 at 04:15 PM.
    I don't know everything. - But I'm good at searching for, and finding, stuff.

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  3. #13
    Hi Nukecad, I have just amended my post! once again you are spot on. About 2 months ago I wrote to DWP to tell them about two very small pensions. It looks as the letter is to let me know that if the pension is a large one I might have to pay tax. They are both very small pensions that won't get me anywhere near the income tax threshold.

    I am so grateful to you for putting my mind at rest, I might even sleep tonight.
    Once again I so grateful to you for all your help.

  4. #14
    Round about this time next year when I've had 52 payments of ESA at £190 a week that equals £9880.00 added to the Severe Disability Premium of £8328.95 I will have received £18,208 which is over the income tax threshold of £11.500 will I get hammered for income tax. Could I argue that if the DWP has paid me correctly then I wouldn't have crossed the income tax threshold. Or do I need to put some money on one side to pay the income tax man!

    Ignore me I have just read your replay properly and you have already covered the tax man scenario!
    Last edited by Rhodd; 08-18-2019 at 05:05 PM.

  5. #15
    Senior Member nukecad's Avatar
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    You are looking at it the wrong way.

    The only part of your ESA that is taxable income is the CB part.

    That's the personal allowance and support group elements. (And any Transitional Amount you may have had when transferring from Incapacity Benefit).

    The premiums are only ever IR ESA so are not taxable income.

    You don't count the whole of your ESA payment as taxable only the CB part.

    Forgeting any TA for now;
    CB ESA Support Group is around £111 a week.
    Any more than that is IR premiums which are not taxable.
    £111 X 52 is £5772 which is well below your tax allowance.
    I don't know everything. - But I'm good at searching for, and finding, stuff.

    Migration from ESA to Universal Credit- Click here for information.

  6. #16
    I am sorry! I read your reply last night but it didn't all go in then I read it again AFTER I asked you the same question. That's the legacy of the stroke I'm afraid.
    But I am incredibly grateful to you.

  7. #17
    Senior Member nukecad's Avatar
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    No worries,

    This stuff can be difficult to understand at the best of times.

    Then on a forum like this one you have to factor in neuro and MH problems making things harder to understand.

    That's why I try to explain things as simply as I can.
    But unfortunately sometimes complicated things need complicated explanations.
    I don't know everything. - But I'm good at searching for, and finding, stuff.

    Migration from ESA to Universal Credit- Click here for information.

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