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LWCRA and/or New Style ESA?

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1 year 9 months ago #271645 by Sharpe
LWCRA and/or New Style ESA? was created by Sharpe
I have been self-employed for some years and I recently applied for Universal Credit due to a long-term health condition making consistent employment very difficult for me.

UC told me they require about 2 months of sick notes before they can begin a Work Capability Assessment. So, once I/they have received those, I think I am likely to be given the LWCRA element. However, I am also aware of New Style ESA. Which should I apply for? What is the difference? Is there any advantage to applying for one over the other? I did vaguely read something about National Insurance Contributions classes. Is it the case that if I'm receiving New Style ESA when I'm on UC then I'm also automatically signed up for LWCRA?

My understanding is that I can still work (but importantly won't be required to) on both LWCRA and New Style ESA. I understand LWCRA has a work allowance of about £344 per month (when housing element is claimed) and New Style ESA has a work allowance of about £608 per month.

Presumably, the UC LCWRA takes precedence over the New Style ESA work allowance?

I feel like I'm missing some key detail or perhaps it's just a bit unnecessarily confusing. I asked the Job Centre and they said they didn't know the answers to my questions but said there was no difference (which didn't help ease my confusion).

Many thanks in advance for any answers or advice!

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1 year 9 months ago #271673 by Gary
Replied by Gary on topic LWCRA and/or New Style ESA?
Hi Sharpe

I don't know where you got your information from but you are incorrect on a number of assumptions you make.

New Style ESA is a fortnightly payment that can be claimed on its own or at the same time as Universal Credit (UC).

New Style ESA is a contributory benefit. Normally, this means you may be able to get it if you’ve paid or been credited with enough National Insurance contributions in the 2 full tax years before the year you’re claiming in.

Eligibility

To get New Style ESA you’ll need to have been an employee or self-employed and paid (or been credited with) National Insurance contributions, usually in the last 2 to 3 years.

www.gov.uk/national-insurance

You will also need to have a fit note (sometimes called ‘sick note’ or ‘doctor’s note’) but you can start making your claim before you have one. If you have only just become ill, you can self-certify for the first 7 days.

You can get New Style ESA on its own or at the same time as Universal Credit. If you apply for and are awarded both benefits, the New Style ESA you are paid will reduce your Universal Credit payment by the same amount.

www.gov.uk/guidance/new-style-employment...ailed-guide#overview

I would advise you to seek advice from your local Welfare Rights Organisation who can take all your circumstances into consideration and give you the correct information; you can find your local Welfare Rights Organisation to help you with advice by clicking on the link below and putting in your post code, it will then come up with a MAP with a list of agencies. advicelocal.uk

Gary

Nothing on this board constitutes legal advice - always consult a professional about specific problems

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1 year 9 months ago #271677 by Sharpe
Replied by Sharpe on topic LWCRA and/or New Style ESA?
Thanks for your response, Gary. I did make contact with CAB but they were only able to repeat generic information to me which is already widely available, i.e. eligibility criteria, etc.

Whereas I am trying to understand whether there are advantages or disadvantages to being on both LCWRA and New Style ESA. I appreciate specific personal circumstances might define whether something is an advantage or not but for example, one advantage that I have seen repeated is that New Style ESA is not means-tested. So are there any other reasons why one might apply for New Style ESA in conjunction with or instead of LCWRA? Or perhaps I should just ignore New Style ESA if I'm receiving LCWRA?

I hope to be able to continue some self-employment so the difference in work allowances might be significant, but presumably the larger work allowance on New Style ESA will be negated by a reduction in UC. I'm not exactly sure to what extent it would be reduced or whether the LCWRA element automatically kicks in if one is in receipt of New Style ESA and restricts the allowance further anyway. I've not been able to find proper information on this sort of thing and I was hoping that someone on this forum might have encountered this issue before or be in a similar situation.

Any help is appreciated, many thanks again!

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1 year 9 months ago #271692 by Gary
Replied by Gary on topic LWCRA and/or New Style ESA?
Hi Sharpe

I will try and answer your question;

If they are on Universal Credit already, do they have to claim New-Style ESA?

No! The Universal Credit award will only be reduced by the monthly amount of New-Style ESA if it has been claimed. If the claimant decides not to bother to claim New-Style ESA, their Universal Credit will be higher. Whichever way they decide to do things, overall the amount of benefits they will receive will be the same: either all as UC, or as New-Style ESA with a top-up of UC.

There are, however, advantages to claiming both benefits...

Why bother claiming New-Style ESA if it is going to count as income for UC?

• Firstly, New-Style ESA is paid fortnightly - so this can help with household budgeting.


• Secondly, if a Limited Capability for Work Related Activity Element (worth £354.28) is going to be included in the UC award, following the Work Capability Assessment - this will be paid one monthly assessment period earlier if the claimant also claimed New-Style ESA than if they didn't.


• Thirdly, a change in household income or savings, or in who is included in the UC assessment, might mean entitlement to Universal Credit ends, but as New-Style ESA is not means-tested, it could continue to be paid, eg where the New-Style ESA claimant has a partner who starts work and their earnings 'float them off' UC.


• Fourthly, whilst someone is getting contributory ESA they will get Class 1 National Insurance Credits onto their NI record, which help to qualify for more benefits than the Class 3 Credits they would get from claiming UC only. Both Class 1 and 3 Credits help people to qualify for the State Pension and a surviving spouse or civil partner to qualify for Bereavement Support Payment, whereas Class 1 (but not Class 3) could in the future help someone qualify for New Style JSA or ESA in the future.

Gary

Nothing on this board constitutes legal advice - always consult a professional about specific problems

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