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Employment & Support Allowance (ESA) Changes to benefits 2013

Summary: Employment & Support Allowance (ESA) - this used to be called Incapacity Benefit

What is ESA?

ESA is for people who can't work because of sickness or disability and aren't receiving Statutory Sick Pay. There are two types of ESA:

  • Contributory ESA which you can receive if you have paid enough national insurance contributions
  • Income-related ESA which is paid if your income and capital are low enough

For both types (and its possible to receive both), you will usually have to have various tests to confirm that you have limited capability for work.

What happened to Incapacity Benefit?

For most new claims, ESA replaces Incapacity Benefit and also Income Support for those who receive it because they can't work due to sickness or disability. If you already receive Incapacity Benefit or such Income Support, this will continue for now but will eventually be replaced by ESA.

Who can receive ESA?

To get ESA you must be 16 or over and under your state pension age. You must be unable to work because of sickness or disability and you must not be entitled to Statutory Sick Pay. You can't get ESA if you or your partner is getting Income Support, income-based Job-Seekers Allowance or Pension Credit.

Contributory ESA

To qualify for this you need to have paid enough national insurance contributions. However this doesn't apply if the DWP converts your Incapacity Benefit or Severe Disablement Allowance into contributory ESA. You may be entitled to income-related ESA too.

Income-related ESA

To get income-related ESA your income will be compared with the amount that the government thinks is enough for you to live on. If you have a mortgage and qualify for income-related ESA you may get help with some of your housing costs e.g. interest due on the mortgage loan. If you rent you should check to see if you can receive Housing Benefit. If you get income-related ESA you will get the maximum amount of Housing Benefit allowed for your circumstances.

Switching to ESA

If you currently receive Incapacity Benefit, Severe Disablement Allowance or Income Support paid on disability grounds, you will have a work capability assessment before a decision is made to convert your current benefit into ESA. If you do not satisfy this assessment ESA will not be paid and you may need to claim Job Seekers Allowance.

Diminishing income

If someone's income drops, then those who have debt payments to make need to see if the repayment level on those debts is still affordable. If not then advice from a debt expert is recommended.

The above is provided as information only. Iva.co.uk does not provide debt advice. You must always seek professional advice before taking any action to resolve your debts.