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TOPIC: Wondering about applying for ESA contrib or ESA IR

Wondering about applying for ESA contrib 4 days 8 hours ago #241476

Hello again,

I am self-employed working 16 hours a week (home based work) on working tax credits. I also get PIP enhanced rate daily living. I get the disability and severe disability elements of working tax credits.

My health has been deteriorating recently and I am due to see my GP on Monday to discuss it. I am wondering about applying for ESA contribution based and so am thinking about getting a fit note from her. I was on ESA contrib and then ESA IR for almost 4 years, until about 6 years ago. It was such a relief to end my ESA claim and be able to work again part-time. I have had episodes of illness since but always resisted the idea of 'signing off sick' again because I didn't want to go through the ritual humiliation of dealing with the DWP's work capability assessments. I was always able to keep going whilst on tax credits because as long as any illness didn't last more than 28 weeks, you could stay on them. But, I had a bad long period of illness in the summer and now I am struggling again. I wonder if I should just accept I can't put the hours in and stop working.

I read somewhere that if you get WTC with the disability elements, then you get national insurance credits equivalent to class 1 contributions. If that is the case, then I can apply for contribution based ESA as I will have enough over the last 2 years. The severe disability premium as part of my housing benefit claim means that I am not able to be naturally migrated onto Universal Credit (because the law changed in January 2019 preventing this). How do I go about applying for ESA contrib? Just feeling a bit lost. I really don't want to give up work. Struggling. Is it right that because of getting the disability elements within WTC that I automatically get class 1 national insurance credits? Sorry for the confused questions.

Thank you.

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Wondering about applying for ESA contrib 4 days 8 hours ago #241479

libra

You can only make a claim for what is now called legacy Contribution Based ESA if you are eligible for the Severe Disability Premium otherwise it would be New Style ESA.

However, for either one, you will need at least 26 weeks of Class 1 or Class 2 NI Contributions, these can only be acquired through paid employment or registered self-employment.

So have you purchased the necessary Class 3 Class 2 Contributions in either of the Tax years 2016-17 or 2017-18, the years will change on 6 January 2020?

Tax Credits only pay NI Credits, not Contributions. If you are receiving the Disability elements then these will be Class 1 Credits which can be used in part but not in whole for a claim for ESA(CB) or NS ESA.

Gordon
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Last edit: by Gordon. Reason: Corrected Class of Contribution required.

Wondering about applying for ESA contrib 4 days 7 hours ago #241484

Hello Gordon,

Thank you for your response. I am registered with a UTR number as self-employed with HMRC and submit self-assessments online by 31st January each year. My net profits have been so low because I only work 16 hours per week that I haven't paid any Class 2 NICs in the last couple of years. I notice in Tax Year 2016/17 that I have a full year of national insurance credits (from looking at my Personal Tax account online). The Tax Year 2017/18 is not assessed/updated yet although I assume I will have national insurance credits because of the disability elements of my working tax credits then too.

However, I think I can pay voluntary contributions to top up my Class 2 NICs. Is that what you mean by purchasing the necessary Class 3 contributions? How do I go about that? Thank you again.

Libra

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Wondering about applying for ESA contrib 3 days 15 hours ago #241506

libra

Forgive me I meant to say Class 2 not Class 3 in my previous post.

Voluntary Contributions are Class 3 and can only be used for your State Pension.

You may be able to pay for the missing Class 2 Contributions, you will have to contact HMRC and I believe that they are not usable for six weeks which would mean a claim next year so the applicable Tax Years will move forward by a year.
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Wondering about applying for ESA contrib 2 days 11 hours ago #241563

Hello Gordon,

Yes, I saw you crossed out Class 3 and meant Class 2 NIcs in your previous post. I will contact HMRC but I realise because of the 6 week wait for them to be usable, the applicable tax years would have to be 2017/18 and 2018/19. I can check that national insurance credits counted as Class 1 will be applied for 2017/18 as they have been for 2016/17 because I got and still get WTC disability elements. However, I can pay Class 2 NIcs as part of my self-assessment 'tax returns' for 2018/19 which has to be submitted online by 31/1/2020. Or, would it be wiser to do it the other way round? Top up 26 weeks of Class 2 NIcs for 2017/18 and then make sure when submitting my self-assessment that my national insurance credits because of my WTC disability elements are applied for 2018/19?

The other way round this, of course, is that because my capital is below the threshold £6,000 and my self-employed income is low, I could apply for legacy Income-related ESA? I get the severe disability premium as part of the applicable amount within my housing benefit (which is a legacy benefit). I think, as a result of the law change because of that court case the government lost last January, if you get SDP as part of a legacy benefit, you cannot be naturally migrated to Universal Credit if you want to make a new claim for a legacy benefit. That is, I can apply for ESA (IR)? And, during the assessment phase, if applying for ESA (IR) I can also apply via Form IS10 for the SDP during the assessment phase? What are the benefits of applying for legacy ESA contrib as opposed to legacy ESA IR, in that case?

Thank you for your help.

Libra

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Wondering about applying for ESA contrib 2 days 9 hours ago #241564

Libra

I can't really offer any advice on which Tax Year you should pay your Class 2 Contributions for but if you are placed in the WRAG then any ESA(CB) would be limited to 365 days but you could requalify if you able to meet Contribution Conditions in a later year than the one that you originally qualified with which would suggest paying for the first year would potentially be better.

As a general rule Income Related benefits will pay more the Contribution Based ones unless your personal circumstances prevent it. If you are eligible to apply for legacy ESA then you can be paid ESA(CB) with an ESA(IR) top-up, just make sure that you say you want both elements to be looked at.

Gordon
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