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Thread: Is my ESA going to be stopped due to a back payment?

  1. #1
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    Is my ESA going to be stopped due to a back payment?

    Hi all,

    It seems I may have just received a £16K back payment from the DWP, which may push me over the savings limit. I think it is related to severe disability premium, which I have only recently applied for and been awarded after years of being eligible. Does this mean that I now need to make a new Universal Credit claim when these funds fall below £16K? I currently owe a lot of money in debt (credit cards etc.) so it would only take a day or so for my capital to return to below £16K.

    I really do not want to make a new claim for Universal Credit.

    I currently claim (unless this has now been stopped) ESA (Support Group), severe disability premium, PIP and Housing Benefit.

    Any suggestions?

    Sincere thanks in advance.

  2. #2
    Senior Member nukecad's Avatar
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    Arrears backpayments of benefits are disregarded (not counted) as capital/savings for 52 weeks.

    When you get a letter about the backpayment it should tell you that.

    Arrears backpayments are disregarded indefinitely if they are because of official error and over £5K, but this seems to be a straightforward backpayment simply because you hadn't applied earlier so it will be the 52 weeks.

    So it won't be counted as savings for those 52 weeks, and your ESA should continue as it currently is.
    If there is any of it left after 52 weeks then what's left becomes savings and can then be counted against IR benefits.

    You can spend the arrears any way that you like for those 52 weeks.

    (Normally you have to be careful about spending savings when you are claiming benefits - eg. one thing you can't do with legacy benefits such as IR ESA is pay off loans or credit cards completely if you don't have to, you are only allowed to pay the minimum that you have to. - UC does allow you to fully pay off debts fully, an improvement on the legacy rules.
    But in the case of benefits arrears then as they are disregarded as savings that doesn't apply and you can spend them as you like before the 52 weeks are up).

    PS. I normally advise opening another account especially to put the backpayment in, that way it's clear to everyone that it is the backpayment money and should not be counted as savings/capital for those 52 weeks.
    Last edited by nukecad; 14-06-21 at 03:06.
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    Sincere thanks.

    Yes, I have recently been sent a letter confirming that the payment will not be regarded as capital for as long as I am claiming income-related ESA, which is a massive relief.

  4. #4
    Senior Member nukecad's Avatar
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    Quote Originally Posted by Heisenberg View Post
    I have recently been sent a letter confirming that the payment will not be regarded as capital for as long as I am claiming income-related ESA,
    That's even better then and they are saying that it won't be counted as savings at all for as long as you have it.
    (Not sure why they have done that unless they are classing it as an official error though?)
    And the disregard will/should carry over into UC when you have to migrate to that.

    If you are going to keep more than £6,000 of it past 52 weeks then I would definately put it in a seperate account to make it clear that it's the backpay monies.
    To keep it simple don't put anything else in that account, just draw from it when you want to spend (part of) the backpayment.
    Last edited by nukecad; 14-06-21 at 08:59.
    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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    Yes, not sure of the reasoning.

    Yep, good advice me thinks.

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