9. Employment and support allowance

CPAG

Income-related employment and support allowance

Contributory employment and support allowance

Employment and support allowance (ESA) is a benefit for people who have limited capability for work because of illness or disability. There are two types: income-related ESA (see here) and contributory ESA (see here).

‘Limited capability for work’ is assessed by the Department for Work and Pensions (DWP), usually at a medical examination (this may be carried out by telephone or video link).

The DWP is responsible for the administration of ESA.

Income-related employment and support allowance

Note: income-related ESA is being replaced by universal credit (UC) and you cannot make a new claim for income-related ESA. Eventually, claimants who are on income-related ESA will be transferred to UC.

Income-related ESA is means tested and is for people with a low income who have ‘limited capability for work’.

Who can get income-related employment and support allowance

If you are not in the UC system, you qualify for income-related ESA if:1s1 and Sch 1 para 6 WRA 2007

•you have ‘limited capability for work’; and

•you are aged at least 16 and under pension age; and

•you are not getting income support (IS), jobseeker’s allowance (JSA), pension credit (PC) or statutory sick pay (SSP); and

•your partner is not getting IS, income-based JSA, PC or income-related ESA; and

•you are not working or, if you are, it is ‘permitted work’; and

•your partner is not working 24 hours or more a week (there are some exceptions to this); and

•you are not in education (this is the general rule, but part-time students and some full-time students can claim); and

•you are in Great Britain, you are not a ‘person subject to immigration control’ and you satisfy the habitual residence test, including having the ‘right to reside’; and

•you have no more than £16,000 capital; and

•your income is less than the set amount the law says you need to live on (known as your ‘applicable amount’ – see here).

For details of these qualifying conditions, including how your imited capability for work is assessed, see CPAG’s Welfare Benefits and Tax Credits Handbook.

1 s1 and Sch 1 para 6 WRA 2007 »

Amount of benefit

The amount of income-related ESA you get depends on your circumstances and the circumstances of your partner, if you have one. The amount also depends on your income and capital. It is calculated by going through the following steps.

Step one: work out your capital

If your capital is over £16,000, you cannot get income-related ESA.1Reg 110 ESA Regs Some kinds of capital are ignored.

1 Reg 110 ESA Regs »

Step two: work out your applicable amount

This is an amount for basic weekly needs. It is made up of personal allowances (see here), premiums (see here), housing costs (see here) and either a support component or, sometimes, a work-related activity component (see here).

Work out your applicable amount by adding together your personal allowance, premiums, eligible housing costs and, once you have been getting ESA for 13 weeks, either the work-related activity component or the support component. From 3 April 2017, the work-related activity component was abolished for most new claims.

The first 13 weeks is called the ‘assessment phase’ and from week 14 it is called the ‘main phase’. Income-related ESA does not include amounts for children.

Personal allowance

Your personal allowance is paid at either the single, lone parent or couple rate depending on your situation. The amount depends on your age and whether you are in the assessment phase or the main phase.

Weekly rate	Assessment phase (weeks 1–13) £	Main phase (week 14 onwards) £
Single
Under 25	61.05	77.00
25 or over	77.00	77.00
Lone parent
Under 18	61.05	77.00
18 or over	77.00	77.00
Couple
Both under 18 (higher rate)	92.20	121.05
Both under 18 (if not eligible for higher rate)	61.05	77.00
One under 18, one 18 or over (higher rate)	121.05	121.05
One under 18, one 18–24 (if not eligible for higher rate)	61.05	77.00
One under 18, one 25 or over (if not eligible for higher rate)	77.00	77.00
Both 18 or over	121.05	121.05

If you are both under 18, you get the higher rate if:

•one of you is responsible for a child; or

•both you and your partner would be eligible to claim income-related ESA if you were single; or

•your partner would qualify for IS if s/he were single; or

•your partner would qualify for income-based JSA or severe hardship payments of JSA.

If one of you is under 18 and the other is 18 or over, you get the higher rate if the younger person would:

•qualify for IS or income-related ESA if s/he were single; or

•qualify for income-based JSA or severe hardship payments of JSA.

Premiums

Whether or not you qualify for premiums depends on your circumstances. You qualify for:

•pensioner premium of £157.65 if your partner has reached pension age (see here). In the main phase, these amounts are reduced by the amount of the work-related activity component or support component for which you qualify;

•carer premium of £38.85 in the same way as you would for IS (see here);

•enhanced disability premium if you or your partner get the highest rate disability living allowance care component, the enhanced rate of personal independence payment or adult disability payment daily living component or you get the ESA support component. It is not included if either partner is over pension age. It is £17.75 if you are single and £25.35 for a couple;

•severe disability premium of £69.40 in the same way as you would for IS (see here).

Housing costs

If you own your own home, income-related ESA can help with certain service charges. Normally, help only starts once you have been getting ESA for 39 weeks.

Components

In the main phase, which usually starts 14 weeks after you claim, you are placed in either the ‘work-related activity’ group or the ‘support’ group depending on your ability to undertake work-focused interviews and other work-related activity. If you are in the support group, you get a support component of £40.60 a week. For claims that started before 3 April 2017, or are linked to a claim which existed before that date, if you are in the work-related activity group you get a work-related activity component of £30.60 a week. Claims made from 3 April 2017 do not include the work-related activity component. For more details about these rules, see CPAG’s Welfare Benefits and Tax Credits Handbook.

Step three: work out your weekly income

Some kinds of income are ignored. For details, see CPAG’s Welfare Benefits and Tax Credits Handbook.

See the relevant chapters of this Handbook for more information on how specific income (eg, fostering allowances and payments from the local authority) is treated.

Step four: deduct weekly income from applicable amount

If your income is less than your applicable amount, income-related ESA equals the difference between the two.

If your income is the same as or more than your applicable amount, you cannot get income-related ESA.

Contributory employment and support allowance

Contributory ESA is not means tested and is for people who have paid sufficient national insurance (NI) contributions.

Who can get contributory employment and support allowance

You qualify for contributory ESA if:1s1 and Sch 1 paras 1-5 WRA 2007

•you have limited capability for work. See CPAG’s Welfare Benefits and Tax Credits Handbook for more details of how this is assessed; and

•you are aged at least 16 and under pension age; and

•you are in Great Britain (there are some exceptions allowed); and

•you are not getting IS, JSA or SSP; and

•you satisfy the NI contribution conditions (see below).

National insurance contributions

You must meet two contribution conditions.

•You must have paid at least 26 weeks’ class 1 or class 2 NI contributions on earnings at the lower earnings limit in one of the two complete tax years (6 April to 5 April) before the start of the benefit year (running from the first Sunday in January) in which you claim.

•You must have paid or been credited with class 1 or class 2 NI contributions on earnings of 50 times the lower earnings limit in each of the last two complete tax years before the start of the benefit year in which you claim.

In certain situations (eg, if you are a carer), the contribution conditions are relaxed. For more information on contribution conditions, see CPAG’s Welfare Benefits and Tax Credits Handbook.

1 s1 and Sch 1 paras 1-5 WRA 2007 »

Amount of benefit

Contributory ESA only includes an amount for you. There are no additions for partners and children. Contributory ESA is made up of a basic allowance and, after an assessment phase, the support component or, for some claimants only, the work-related activity component. The work-related activity component was abolished for most new claims made from 3 April 2017. During the 13-week assessment phase at the start of your claim, the basic allowance is paid at a lower rate if you are under 25. After the assessment phase, the basic allowance is paid at the same rate regardless of your age (the main phase).

Unless you are in the support group, your contributory ESA is only paid for one year.

See CPAG’s Welfare Benefits and Tax Credits Handbook for more information.

Weekly rate	£
Assessment phase
Under 25	61.05
25 or over	77.00
Main phase
Basic allowance	77.00
Work-related activity component	30.60
Support component	40.60

You may get less than this if you have certain types of income, such as an occupational pension. See CPAG’s Welfare benefits and Tax Credits Handbook.

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