Means-testing Incapacity Benefit?

[windywillow]

Apologies if this is in the wrong category and I know its name has changed recently, but does anyone know if this benefit (ESA?) is going to become means-tested?

About a year ago I heard that it was a possibility but have heard nothing since.

[Buenchico]

The benefit is already means-tested for those who are in receipt of Income-Based ESA. However the test is a simple one: ESA is payable if the applicant has savings of less than £16,000 and their partner (if any) doesn't work for 24, or more, hours per week (on average).

Income-based ESA is paid when the applicant doesn't meet the conditions for Contribution-Based ESA. That requires that the applicant has up to date National Insurance contributions.

Section 51 of the Welfare Reform Bill, currently before Parliament, proposes limiting the period on Contribution-Based ESA to 365 days:
http://www.publicatio...010-20120075_en_1.htm

The Bill has completed its passage through the Commons. The First Reading of the Bill in the Lords (which was simply a formality, introducing the Bill into the House) took place on the 16th June. No date has yet been set for the Second Reading.

Chris

[sandyRoe]

Is Incapacity Benefit and ESA the same thing?

[Buenchico]

Sandy:
Not exactly, but ESA replaced Incapacity Benefit for new applicants from 27 October 2008. (Those who were already in receipt of IB remained on it and, if their eligibility hasn't changed, continue to do so).

[sandyRoe]

So, if you're in receipt of it before 2008 the means tested element doesn't apply? If it does I'll have a lot to pay back.

[windywillow]

Thank you Buenchico, you are very kind. For those on Incapacity Benefit (pre-2008), do you know if there's a possibility that the benefit will be withdrawn if the claimant has savings of over a certain amount?

[Buenchico]

Everyone on Incapacity Benefit will have their benefit reviewed. The process started in October 2010 and is expected to be completed by 2014.

So, Sandy, if your benefit hasn't already been reviewed, it will be at some time during the next three years (unless you've already reached state pension age, or you will do so before 6 April 2014).

The review will determine whether you're eligible for ESA.

Chris

[sandyRoe]

Thank you, Buenchico.
I'll reach pension age next year. I was worried there for a minute.

[Buenchico]

Thanks for your reply, WindyWillow.

My post to Sandy seems to answer your question. i.e. your benefit will be reviewed, probably resulting in a transfer to ESA. Even if you qualify for the (non-means-tested) Contribution-Based ESA, which seems to be unlikely, you could only be on it for a maximum of one year (assuming that the Welfare Reform Bill becomes law). So you'll eventually end up on Income-Based ESA, which is only payable if your savings don't exceed £16,000.

Chris

NB: I've answered as accurately as I can, based upon reading the relevant pages on the Directgov website, the text of the Welfare Reform Bill and several other sources (including media reports and the website of the CAB). I'm reasonably confident that my answer is correct but I'd still urge you to consult your local CAB to seek confirmation of what I've written. (Benefit issues are an absolute minefield. I'd hate to get it wrong!)

[windywillow]

Thank you very much Buenchico. You have been very helpful.

[hayley_maree2007]

hi dont really know much about esa apart from that fact that ive been told i dont wantthem to stick me on it.unfortunatly was told today however that everyone is losing incapacity next year and if your living with a partner who works you will get nothing but dla if you are long term sick. praying this isnt true though