How does ESA work?

There are two different types of ESA.
•Some people will get ‘contribution based ESA’ (CB-ESA) because they made enough National Insurance contributions while they were at work to qualify for it (similar to Incapacity Benefit).
•Others will get ‘Income-related ESA’ (IR-ESA) provided they have little or no income and little if any capital (similar to Income Support)

Everybody making a new claim for ESA (unless terminally ill) will go into the ‘assessment phase’ for the first 13 weeks. During this period, the Department for Work & Pensions (DWP) will assess your physical & mental health and your prospects of working or training for work. While this happens, single people will be paid the basic ESA allowance which will be the same as Jobseeker’s Allowance. This is £71.70 for people 25 or over and £112.55 for couples. These figures are correct for the period April 2013 until March 2014.

At the end of the 13 weeks (it could take longer) the DWP will make a decision about your eligibility for ESA. There could be three possibilities:
•Some people will be found ‘fit for work’ and could claim JSA.
•Some will remain on ESA and will move into the ‘work-related activity’ group.
•Some will remain on ESA and move into the ‘support’ group.

Both groups who remain on ESA will get an additional amount – £28.45 for the ‘work related activity group’ and £34.80 for the ‘support’ group. People in the support group who get Income-related ESA will also receive the Enhanced Disability premium – an extra £15.15.

It will be possible for people on Income-related ESA to be paid extra money called ‘premiums’ currently paid to people on IS who qualify for them (e.g. because they receive a certain level of Disability Living Allowance, live alone and nobody is claiming Carer’s Allowance for supporting them). This will be in addition to the basic ESA allowance and the additional amount paid for support or work related activity.

1 year cap on contribution based ESA for those in the Work Related Activity Group

If you are placed in the WRAG and are receiving ESA based on your National Insurance contributions, from April 2012 you will only get CB-ESA for 12 months. After this time, if you would also qualify for ESA because you have a low household income you can continue to receive it. If, however, you live with a partner who works and your household income is over the earning’s threshold or you have savings/capital over the allowed limits, you may no longer qualify for this benefit.

Phasing in ESA

If you are currently receiving IB, IS or SDA you may be entitled to less ESA under the new system than what you get at the moment. For example people now on IB who have partners or children (or both) are paid additional allowances for them but this will not happen with ESA. So when you move to the new benefit, you will get an extra payment called ‘transitional benefit’ which will bring your ESA up to the same level as your current payment. No existing claimants should be worse off because of the change to ESA.

The disability premium is not paid with ESA but some other premiums, such as the Severe Disability Premium, are available to people on Income-related ESA if you qualify for them. People in the Support group on Income-related ESA will also qualify for the Enhanced Disability Premium.

Different rates apply to couples. People who own their own home might receive help with mortgage costs in certain circumstances.

You can find the ESA regulations by visiting the government website at: http://www.opsi.gov.uk/si/si2008/uksi_20080794_en_1#Legislation-Preamble

You can also get more information on ESA on the DirectGov website: ttp://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Illorinjured/DG_171894