LOSING EMPLOYMENT & SUPPORT ALLOWANCE

About 100,000 ill and disabled people will lose their Employment and Support Allowance on 30 April 2012.

From that date a new time limit will apply to the Employment and Support Allowance which is paid on the basis of National Insurance contributions. It is called contributory ESA. At the moment it can be paid indefinitely. In future the allowance, worth £99.15 a week, will stop after one year.

The one year time limit will apply at once to an estimated 100,000 people who have already been on contributory ESA for at least a year. Another 100,000 will lose it by April 2013.

The number affected will grow by about 200,000 a year. By 2015/16 a total of 700,000 people on contributory ESA will have lost it when they reached the one year time limit. The Government estimates the net savings to the Treasury will be £1 billion in 2014/15.

More detail

Employment and Support Allowance is paid to people who are too ill or disabled to work. It was introduced in October 2008 to replace Incapacity Benefit. Everyone on Incapacity Benefit is being reassessed and put into one of two ESA groups.

The time limit applies to people in what is called the Work Related Activity Group (WRAG). They have been assessed as able to return to work with some help. The time limit does NOT apply to those in the Support Group who are not expected to return to work because their condition is long-term and severe.

The time limit applies to ESA which is based on National Insurance contributions (contributory ESA). It does NOT affect the means-tested (income-related) ESA paid to those with a low income.

The time limit includes the 13 weeks spent in the assessment phase at the start of the claim for ESA when people are allocated to the work group or the support group.

Can you get money from other sources?

If you are due to lose ESA you should have been sent a letter by the DWP. It is very important to check if you can replace at least some of the ESA you will lose.

1. Can you claim income-related ESA? That is based on your income and savings and if you have a partner on theirs as well. You cannot get income related ESA if your partner works more than 24 hours a week or if their income is too high or your joint savings are more than £16,000. The Government estimates that 60% of those who lose contributory ESA will be able to get at least some income-related ESA. Income-related ESA has no time limit. If you get income-related ESA you may be able to get some help with mortgage payments.

2. Can you get your council tax reduced through Council Tax Benefit? If you pay rent can you get that reduced through Housing Benefit? If you already get either of those benefits they should go up when your ESA goes and your income is reduced. But that will only happen if you tell the council which pays them about your drop in income.

3. Can your partner get Working Tax Credit? If you have no children your partner must normally work at least 30 hours a week to get Working Tax Credit. But if they are over 60 or qualify for disability element that is just 16 hours a week. If you have children then your partner must normally work at least 24 hours a week (assuming you do not work at all). But that may be reduced to 16 hours for a variety of reasons including your own health. Get advice. If your partner already gets tax credits make sure you report your reduced income when ESA stops. Your partner's tax credit should then increase.

The Government estimates that claiming extra from these other benefits will reduce the average loss for those who lose from the full £99.15 a week to about £52 a week.

Where to get help

You can get help and advice from your local Citizen's Advice Bureau. Your local council may have a welfare rights office, though these have been cut back recently. You can also enquire at your local JobCentrePlus. Or you can work out your own entitlement at www.entitledto.com. That takes you to the website of  www.turn2us.org.uk and you can call them on 0808 802 200. The organisation Disability Rights UK may be able to help through its website or publications www.disabilityrightsuk.org/about.htm

The Government published some information on the impact of the Welfare Reform Act on disabled people which you can find through this page www.dwp.gov.uk/policy/disability/welfare-reform-bill-2011-and-disabled. Many of the figures in this blog are taken from the estimates in those documents.