Contribution ESA - Support Group and Pensions

Hi Everyone

I am sorry to trouble you but am looking for some advice if possible, apologies if this has been covered before.

I am currently on CB ESA in the support group (over due ESA renewal because of WCA's suspension), presuming i stay on the same CB ESA, I am 55 next April and have the opportunity of taking 2 pensions I have

1. first pension would give me a lump sum of 8000 pounds with NO monthly pension

2. second pension would give me a lump sum of 20000 pounds with an annual pension of 3450

Do you know, would i have to declare it to the DWP (Lump sums and /or annual pension) and would it affect my CB ESA.

I really don't want to have to ring the DWP for advice for obvious reasons, so any help from your wealth of knowledge would be very much appreciated.

Best wishes

Hi Sweetheart (it feels very strange calling you that! ),

As long as you are on contributory ESA, with no income-related top-up, then no amount of savings will affect your benefit. The only income that can have an impact is pension (don't ask me why!), the first £85 per week would be ignored, then 50p ESA lost for every extra £1 pension received.

I believe you would need to inform the DWP about your pension, even if you get less than £85 (the current rate) per week.

If the combined pension + ESA + any other taxable income brings you above the personal tax allowance then you would also be responsible for informing HMRC so that the tax can be paid (mine is taken out of my pension before I receive it each month).

Can you clarify Mrs H. - do I understand correctly.
If ESA is CB based then any lump sum from a pension is not counted for tax purposes , it would only be the weekly / monthly amount received that is taken into account for tax purposes ? or does HMCR need to know about the lump sum too ? I get really confused about this

I believe that the lump-sum is tax-free - but I am only speaking from personal experience, I don't have any in-depth knowledge.

Contributory ESA is not affected by the lump-sum payment, only by weekly payments in excess of £85.

Thank you Gordon, I had misunderstood Neptuno's question