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Thread: ESA and LGPS pension

  1. #1

    ESA and LGPS pension

    Hi,

    Hope someone can help me.

    I've been in the local government pension scheme (LGPS - WYPF) for 20+ years and am currently on long term sick due to my arthritis.

    As I have been on long term sickness many times in the last four years, I am thinking of applying for ill-health retirement (IHR) - I'm only 45yrs.

    Therefore, if I got IHR and say my annual pension was around £12,000, then would I still be able to apply for ESA or not?

    Many thanks.

  2. #2
    Senior Member nukecad's Avatar
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    If you have sufficient NI contribution payments in the last 2 qualifyng years then you could apply for 'New Style' ESA.
    NS ESA is Contribution Based not Income Related, so normally savings/income wouldn't count.
    https://www.gov.uk/guidance/new-styl...port-allowance

    HOWEVER 'unearned' income from a occupational/personal pension does count as income for NS ESA and is fully taken into account.

    'Fully taken into account' means that NS ESA would be reduced £1 for £1 by the pension income.

    If you were awarded NS ESA it would be at one of 2 rates (2019/2020 rates).
    WRAG would pay £73.10 a week.
    Support Group would pay £111.65 a week.

    Taking the pension at £12K that would be roughly 12,000 / 52 = £230.77 a week

    So the pension payment would 'wipe out' any monies due from NS ESA.

    Edit. The same would apply if you were to claim Universal credit, the pension income would be deducted £1 for £1 leaving no UC payable.

    You may want to take a look at possibly claiming PIP, that would not be affected by the pension income.
    Last edited by nukecad; 02-04-19 at 18:03.
    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.

  3. #3
    Hi nukecad

    Many thanks for your reply and your calculation so basically I won’t get any ESA.

    I’m already getting PIP.

    thanks

  4. #4
    Senior Member nukecad's Avatar
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    Quote Originally Posted by kmb786 View Post
    I’m already getting PIP.
    That could make things a little more interesting if you are already claiming another IR benefit, such as housing benefit.
    Basicaly that would mean you were entitled to the Severe Disability Premium with the IR benefit so are currently banned by law from claiming UC so can/have to claim the 'Old Style' benefits.

    The rules on 'Old Style benefits are different, more generous, and not all of the pension is taken into account.
    They deduct half of any pension amount over £85.

    Edit - I've done another calculation in those circumstances, but I'll wait to see if you do have SDP, or an entitlement to it.
    There is more to it than just less of a deduction, other rules would come into play.

    If you would like to double check for yourself then you could enter your details into one or more of the online benefit calculators:
    https://www.gov.uk/benefits-calculators
    There is no limit on using them so you could do your circumstances as they are now, then do it again as they would be if you take the pension.
    The comparision could help you decide which way to go.

    I'm not sure just how taking the pension early on ill health grounds would affect it in future, would future pension payments be less than if you didn't take it early?
    That's something else you should look into before deciding.
    Last edited by nukecad; 02-04-19 at 22:23.
    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.

  5. #5
    Senior Member Lighttouch's Avatar
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    I took medical early retirement from the Public Sector back in 2011 aged 54. I haven't work since.

    Here are a few tips
    - I didn't even bother applying for ESA initially as I wouldn't be entitled to anything
    - When you get a private pension it will rise yearly following the CPI. You will no longer pay NI. You may pay a small amount of income tax.
    - You won't be eligible for a full state pension until your 66/67. And only if you sign on for ESA to credit your NI credits. You need 35 years worth of NI Contributions to get a full pension
    HR would send you to an independent doctor to see if you qualify for early retirement at Tier 1, 2 or 3.
    - You can claim PIP as it's non-means tested.

    £!2K isn't a lot to live on and splash out. I supplement my income through taking a lodger in. As I'm single and disabled the Council allow me to get thee single persons discount as my lodger helps me out. So the Council 'disregards this person' allowing me to keep my discount.

    If you get pensioned off at the highest level e.g. Tier1, you can still work reduced hours.

    It gets a bit technical trying to find out what your pension will be - look into it thoroughly!

  6. #6
    Senior Member nukecad's Avatar
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    Lighttouch make an important point there about NI credits towards your state pension.
    Even if a benefit will not be paid these NI credits should be secured.

    But, as usual, with the coming of UC and 'New Style JSA/ESA' there have been problems and misunderstandings with getting NI Credits Only.

    In particular they will tell you that Credits Only ESA does not exist and that you have to claim JSA (or UC).

    I believe that this is mainly due to their internal quidance that only mentions JSA, ESA is not mentioned in it at all.
    (Although it's even more complicated than that, see post #4 in the link below.

    The first post in this thread gives the (currently) correct(?) way to get NI credits, using form JSANC1
    https://www.youreable.com/forums/sho...l=1#post147547
    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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