ESA and time-limiting: a Q&A

Issue 228 (June 2012)

Simon Osborne rounds up some of the questions being posed about the detailed working of the time-limiting of contributory employment and support allowance (ESA).

Q.1 My client’s contributory ESA is due to expire soon due to time-limiting. I know that this will not happen if she gets into the support group; but how does she do that?

She needs to satisfy the assessment for ‘limited capability for work-related activity’, so qualifying for the support group for ESA – see Appendix 11 of CPAG’s Welfare Benefits and Tax Credits Handbook (p1559). There is no points score – it is a case of showing that one or more of the descriptors in that assessment applies. Some people (eg, those with a terminal illness or receiving certain types of chemotherapy) are automatically put in the support group (see p185 of the Handbook).

In most cases, where this does apply, the change to ESA entitlement will probably be by way of applying for a supersession – eg, on the basis of a change of circumstances due to a deterioration in their health. Getting the change via an application for revision would mean that the support component would be backdated in full – but satisfying the grounds for a revision will be difficult in most cases, and would involve needing to show an error of law on the original decision. We understand that the DWP is in the habit of sending out an appeal form (a GL24) when a claimant requests to be put in the support group. We assume that this is merely its way of gathering information for a supersession/ revision, as in many cases it will be too late for an appeal against the original decision. However, if the claimant is unsuccessful on supersession/revision, it will be possible to appeal against that.

If the contributory ESA does expire due to time-limiting, it can be requalified for either by getting into the support group, or by satisfying the national insurance contribution conditions afresh – see Q6 below.

Q2. My client has already submitted a request to be put in the support group, but has no decision yet, and his contributory ESA will expire very soon due to time-limiting. Will he continue to get it until the decision is made, or if he appeals against a refusal will he get it again?

No. There are no special rules allowing contributory ESA that has expired due to time-limiting to continue simply because of a request to be put in the support group, or an appeal about that. But if he is successful (ie, because he is in the support group), he will get his contributory ESA back, with arrears of the support component.

Q3 My client’s contributory ESA has expired due to time-limiting. He has got worse and now has a very good case to be put into the support group – but won’t he also have to satisfy the national insurance contribution conditions again to get contributory ESA back?

No. As long as he has retained limited capability for work since losing his contributory ESA (ie, has continued to remain unfit for work due to satisfying the work capability assessment), if he then gets put into the support group he is entitled to it again without having to satisfy the national insurance contribution conditions (this is because the relevant rule here, at section 1B of the Welfare Reform Act 2007, does not include a national insurance contribution test).

Q4 I’ve been told that if your ESA in youth has expired due to time-limiting, even though you can’t actually get ESA in youth again you can still get contributory ESA again if you are put in the support group, even though you don’t satisfy the national insurance contribution conditions. Is that right?

Yes. As in Q3 above, if you continue to have limited capability for work, you can get contributory ESA again in this situation in the same way as someone who has lost contributory ESA can (it’s because, technically speaking, ESA youth is still a ‘contributory ESA’). So, if you are put in the support group, it doesn’t matter if you don’t satisfy the national insurance contribution conditions.

Q5 I see that ESA in youth has been abolished from 1 May; but can my client backdate a claim to before then to establish entitlement?

Probably not. It is true that ESA in youth has not actually been abolished: rather, the rule is that no claim can be made for it on or after 1 May. But the problem is that if he cannot make a claim, then it may well be that it can’t then be backdated to before 1 May. That is the approach that the DWP seems likely to take.

Q6 If my client loses contributory ESA, can she get it again if she then satisfies the national insurance conditions – ie, even if she is not in the support group?

Yes. Satisfying the national insurance conditions again is a separate way of requalifying from being put in the support group. But remember that, except in cases where the claimant was transferred to ESA from incapacity benefit (IB), at least one of the relevant tax years that applies to the new claim must be different from (later than) those that applied to the expired claim. Where the claimant was transferred from IB, no contribution years were involved, so she now simply has to satisfy the national insurance conditions on the new claim. However, in practice many claimants in this situation may not qualify, due to the requirement actually to have paid sufficient contributions in one of the relevant tax years.

Remember that under the linking rules, if she is still within a linked period of limited capability for work, the relevant tax years remain the same that applied to the original award. However, the only linking rule that applies now is the 12-week linking rule. So if she has remained entitled to income-related ESA, she would then need to come off ESA and so break her period of limited capability for work (eg, by returning to work or being accepted for jobseeker’s allowance) by more than 12 weeks, and then satisfy the national insurance contribution conditions afresh. She would, of course, also need to be accepted as being sick (ie, having limited capability for work again) on the new claim. But if she is not entitled to income-related ESA either, see also Q7 below.

Q7 My client has lost his contributory ESA due to time-limiting, and there doesn’t seem to be much prospect of him being put in the support group or going back to work. His wife works full-time and he won’t be able to get income-related ESA. So will he just lose everything?

He will certainly lose his entitlement to contributory ESA unless and until he either gets into the support group, or (having lost it) requalifies by satisfying the national insurance contribution conditions afresh. Otherwise, if he is not entitled to income-related ESA either (the DWP should have checked about that), as long as he retains limited capability for work, he should still get national insurance contribution credits on that basis, and they will count towards his retirement pension.

If he is not entitled to income-related ESA either, he may be able to satisfy the national insurance contributions for contributory ESA afresh after a break of more than 12 weeks in his ESA entitlement, even if he has remained sick – eg, he has not gone back to work). DWP guidance suggests this is possible. This is because in this situation, his ESA will have ceased altogether. As far as ESA entitlement is concerned, if he reclaims after 12 weeks he will have started a new period of limited capability for work for that new claim. So the tax years taken into account may now be different from those that applied to his previous claim. But it remains the case that at least one of the tax years that apply to his new claim must be later than the latest of those that applied previously. And, of course, he must then satisfy national insurance contribution test.

Example:

Charlie worked full-time until February 2010, when he became ill. He claimed and was awarded contributory ESA, and was placed in the work-related activity group.

Under the time-limiting rules, his contributory ESA stopped on 1 May 2012 – ie, because he had already been on it (and not in the support group) for a year. As Charlie’s wife works full-time, there is no entitlement to income-related ESA, even though he has remained sick. He still gets credits for limited capability for work.

Charlie reclaims contributory ESA on 6 August. As he has not been entitled to ESA for more than 12 weeks, for the purpose of the benefit claim, he has started a new period of limited capability for work. Because of that, it is now possible that he may requalify for contributory ESA, on the basis of the relevant tax years (or at least one of them) now being later than those that applied to his previous award. The relevant tax years will now be 2009/10 and 2010/11. As he was working full time until February 2010, it is possible that he will have actually paid sufficient contributions in the earlier of those tax years, so satisfying the first contribution condition.

Q8. My client is undergoing transfer and reassessment from IB to ESA. If this is successful and he gets contributory ESA, will the time he spent on IB count for the time-limiting rule?

No. Only time spent on ESA can count, and any time in the support group will be ignored. So your client should, if he continues to satisfy the normal rules, be entitled to contributory ESA at least for a year from the date his entitlement to that starts.

Q9 My client has appealed in order to try and get in the support group, but his contributory ESA has now expired. Can he get it while the appeal is pending? And could the First-tier Tribunal look at whether he still passes the work capability assessment?

There are no rules allowing the continued payment of contributory ESA in this situation. (This is a different situation from that where someone has appealed having actually failed the work capability assessment (WCA) – ie, been found fit for work.) In your client’s situation, he may be entitled to income-related ESA, or at the least to national insurance contribution credits – see Q7 above.

In theory at least, the tribunal could also look at whether your client still passes the WCA. This is because when you appeal you allow, at least in theory, all aspects of the ESA decision to be looked at. In practice, it is unlikely except in those cases where the tribunal thinks that your client may well fail the WCA. Even then it should give your client a warning that it is thinking of this.

Q10 I would like to see some official information from the DWP about all this. Is any of that available?

Information for advisers and others is available at www.dwp.gov.uk/adviser/updates/changes-to-contribution/ and official guidance for DWP decision makers is available at www.dwp.gov.uk/docs/m-13-12.pdf.

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