Employment and support allowance
Note: ESA is affected by the introduction of UC (see here). ESA is a benefit for clients who cannot work because of an illness or disability. Employees usually claim statutory sick pay (SSP) for the first 28 weeks of illness rather than ESA. Self-employed and unemployed people claim ESA straight away.
There are two types of ESA.
•Contributory ESA (sometimes called ‘new-style ESA’), which is paid if a client satisfies the NI contribution conditions. It is not means tested. It is only paid for 52 weeks, except if the claimant is in the ’support group’ (see below). Contributory ESA is not being replaced by UC.
•Income-related ESA, which is means tested and has no NI contribution test or maximum duration. It is possible to receive contributory ESA topped up with income-related ESA. Income-related ESA is being replaced by UC and a client cannot make a new claim for it.
A basic allowance of ESA is paid during an initial ’assessment phase’ of 13 weeks. The amount paid could be higher if, for example, it includes disability premiums.
The client’s ability for work is then assessed by the DWP under a ’work capability assessment’. A small number of people are automatically treated as having limited capability for work and do not have to undergo this assessment – eg, people who are terminally ill, those receiving or recovering from certain types of chemotherapy and hospital patients.
After the initial assessment phase, clients who pass a medical assessment go on to the ’main phase’ of ESA. Clients are put into either:
•the ‘work-related activity group’ and must attend work-focused interviews and undertake work-related activity. They may get an extra amount of ESA called the work-related activity component, but few claimants can now get this; or
•the ‘support group’ and have no work-related requirements. They also get an extra amount of ESA called the support component.
Clients in the work-related activity group may have their benefit reduced by a sanction if they do not attend a work-focused interview or carry out work-related activity. There is a right to appeal this and it is always worth considering whether a sanction could be challenged. Clients whose income-related ESA has been reduced by a sanction may qualify for hardship payments.
The general rule is that people cannot get ESA if they are working. Clients can do some limited work (called ’permitted work’) while on ESA, but they must notify the DWP and they can lose their ESA entitlement if they earn more than a certain amount. Clients affected by these rules may need specialist advice.
Contributory ESA is not means tested, but it is affected by any income from certain pensions and is subject to the ’overlapping benefit’ rules. It can be ‘topped-up’ with income-related ESA or with UC.
Income-related ESA is a ‘passporting’ benefit, which means that it can help the client to get maximum HB, help with health costs, free school meals for their children, budgeting loans and Scottish benefits such as funeral support payment. Extra amounts of income-related ESA, called premiums, can be paid depending on the circumstances of the client and their partner.
Contributory ESA is taxable; income-related ESA is not.