We’re now amid the biggest welfare reform in a generation as claimants are transferred onto Universal Credit from six existing benefits and amongst the legacy benefits it will take over from its income-related Employment and Support Allowance (ESA).
However it is possible to get ESA as well as Universal Credit, so how precisely does this work? And what are the rules for eligibility and the payment rates?
ESA is given to those who have an incapacity or health condition that influences how much they work.
There are two types, contributory ESA, which has been renamed new style ESA, or income-related ESA.
Income-related ESA is being replaced by Universal Credit.
New style ESA is not means-tested but is taxable, whereas income-related ESA is means-tested, so it takes into account income and savings but it’s not taxable.
The new style ESA can be claimed on its own or at the same time as Universal Credit and you’ll be able to get Universal Credit as well if you and your partner don’t have savings of more than £16,000.
Sounds great doesn’t it but the new style ESA will be classed as an income when determining how much Universal Credit you’re qualified to get, so if you’re paid the new style ESA it will reduce your Universal Credit payment by the same amount, bit pointless actually, it’s almost like robbing Peter to pay Paul but I’m sure it looks good on paper but not when it’s coming out of your pocket.