What can you do if the interest rate on your card increases?

Changes to the sickness benefit called employment and support allowance are on their way.

Font size

0
0
0
0

Since it’s been introduced, employment and support allowance has received more than its fair share of criticism. Disability groups say it’s unfair because it means that people who are too ill to work are being denied disability benefits. The government announced in its spending review that one type of ESA would only be paid for 12 months to some claimants – something that’s caused a lot of worry to a number of those who receive it.

The spending review changes – an overview
In the spending review, the Chancellor said that people who receive a certain type of employment and support allowance (one that’s based on their National Insurance contributions rather than one that’s means-tested) would only be paid the benefit for a limited time.

– Employment and support allowance would only be paid for a year. This change would apply to people who were assessed as being able to do some work and who received contribution based employment and support allowance.

– After 12 months they would have to apply for other benefits. There’s no guarantee they would receive any benefits as it would depend on savings they have and – if they have a partner – their partner’s income and savings.

SAVVY TIP: If you want advice on ESA, you can ask SavvyWoman’s benefits expert, Lee Healey from IncomeMax a question (the details are at the bottom of the page), or you can contact your local Citizens Advice or download information from the charity Disability Alliance’s website.

What applying for ESA involves
If you can’t work because you’re ill you’ll normally receive statutory sick pay or sick pay through your job. Once that runs out you’ll have to apply for employment and support allowance. When it was introduced ESA only applied to new claimants but from this autumn existing claimants of incapacity benefit will be assessed and moved to ESA by April 2014. There’s some information about the timings of the move from incapacity benefit to ESA from the Disability Alliance.

The application process means:

– You have a 13 week assessment phase. During this time you’ll be assessed to see what work you’re capable of doing. You’ll have to fill in a questionnaire and your doctor will have to provide information. You will also have to take part in face-to-face medical assessment unless you’re terminally ill or receiving chemotherapy.

SAVVY TIP: There’s a useful factsheet about the medical assessment and how points are awarded on the Disability Alliance website. During the assessment phase you’ll receive a lower rate of ESA of a maximum of £65.45 a week. If you score more than 15 points, you can remain on ESA.

– You’ll also have to attend a ‘work focused interview’ to talk about what work you might be able to do and what support you can expect.

SAVVY TIP: When the previous government introduced ESA they said that people with a terminal illness wouldn’t have to have a work focused interview either, but in its report called Failed by the System, published in the summer, Citizens Advice says some staff in Jobcentres and at the Department for Work and Pensions don’t seem to know the rules and were forcing people with terminal illnesses to attend these interviews.

Results of your assessment
After you’ve been assessed you can be put into one of two groups:

– Work related activity group: If you’re in this group you’re expected to take part in work focused interviews and prepare for work (with support from the job centre).

SAVVY TIP: You receive ESA at up to £91.40 a week if you’re a single person from week 14 of your claim but not in the first three days.

– Support group: If you’re in this group you’re not expected to do any work and you’ll receive up to £96.85 a week.

Appealing the assessment
According to Neil Coyle, Director of Policy at the Disability Alliance, almost 40% of people who appeal their medical assessment decision win their cases. “Although 39% of assessments are being overturned at appeal, there’s such a backlog that some people have to wait months before their case gets heard.”

SAVVY TIP: There’s information on how to appeal a benefits decision on the Direct.gov website

Types of ESA
There are two types of Employment and Support Allowance; income based and contributory based.

– Contribution based ESA: This is paid if you have made enough National Insurance payments. If you’ve taken early retirement from work on ill health grounds and are receiving a pension you may receive less ESA.

SAVVY TIP: If you receive less than £85 a week from your company pension, the amount of ESA you get isn’t affected. If you get more than £85 a week you’ll lose ESA at a rate of 50p in the pound above £85. So if your pension is £115 a week – or £30 above the £85 threshold – you’d lose ESA at a rate of £15 a week.

– Income related ESA: You should have savings of less than £16,000 to qualify and, if you have a partner, they should not work for more than 24 hours a week, on average.

SAVVY TIP: Your partner’s savings will also be taken into account. And if you have more than £6,000 of savings, even if you have less than £16,000, the amount of ESA you receive will be affected. You’re assumed to earn £1 a week for every £250 (or part of £250) you have between the two thresholds. There’s more information about ESA eligibility on the Direct.gov website.

Related articles:

Buying income protection insurance

Critical illness insurance; finding the right policy

It costs three times as much to raise a disabled child

SavvyWoman email newsletters: If you found this information useful why not sign up now to receive free fortnightly email newsletters with money saving tips and help? You can sign up at the top of any page on the website and your details won’t be passed to any other company for marketing purposes.

SAVVY HELP: Why not ask Savvywoman’s panel of experts a question about your finances by clicking here? The answer will be displayed on the website but your surname will never be used.