Incapacity to ESA: transfer and reassessment

Issue 221 (April 2011)

Simon Osborne reviews the rules under which most existing claims of benefit on the basis of incapacity for work are being transferred to claims for employment and support allowance (ESA), with entitlement reassessed.

Introduction

Between April 2011 and April 2014, current claimants of benefit for incapacity for work (incapacity benefit (IB), severe disablement allowance (SDA) and income support (IS) on grounds of disability, including incapacity) will have their claim transferred to one for ESA, with their entitlement reassessed. The key element of the transfer process is that transferred claimants will be subject to the work capability assessment (WCA) as part of the reassessment process.

This national application of the transfer and reassessment process follows on from what is officially regarded as successful piloting in the Burnley and Aberdeen benefit areas since last October. Overall, around 1.5 million people will be subject to the process. Findings from the pilots indicate that around 30 per cent of transferred claimants fail the WCA (with the result that they are no longer entitled either to their old incapacity benefit or to ESA), although another 30 per cent both passed the WCA and were placed in the support group, meaning a slightly higher award of ESA and no conditionality.1

What claims are being transferred?

  • Most ‘existing awards’ of IB/SDA/IS for incapacity for work are to be transferred. In fact, the IS awards that are being transferred are any IS awarded on grounds of disability – ie, so will also include people getting IS on the basis of being registered blind or on the basis of being a disabled or deaf student.
  • Disabled or deaf students being transferred from IS will be able to get ESA. while in education, even if they do not get disability living allowance.2
  • Anyone with an existing award who is due to reach state pension age before 6 April 2014 will not be transferred.
  • Even people who are currently exempt from the personal capability assessment will be transferred.

When will the transfer take place?

  • The rules allow the transfer of most claims of an existing award at any time. In practice, the transfer process will be triggered by the date the claimant is next due to have her/his fitness for work assessed under the personal capability assessment (PCA – people currently exempt from the PCA will be allocated a transfer date).
  • Nationally, the majority of the transfers will take place between April 2011 and 6 April 2014.
  • People with existing claims of IB and IS will be transferred first, then those with awards of SDA.

How does the reassessment process work?

  • In advance of the transfer, claimants will be sent a notice informing them that their claim is to be transferred and their eligibility for benefit reassessed under the WCA; then they will receive an ESA50 questionnaire to complete. Claimants will get a telephone call about this first, to ask if they need any particular help.
  • It will not be necessary to actually make a claim for ESA – that will be automatic.
  • The normal WCA rules will apply to the reassessment. Failure without good cause to return the questionnaire or attend the medical will result in loss of benefit – ie, both incapacity and ESA.3
  • Claimants who pass the WCA and the basic rules for ESA (national insurance contribution conditions for contributory ESA will not need to be re-satisfied) will have an award of ESA calculated.
  • The claimant will then be sent a ‘conversion’ decision on her/his entitlement to ESA. Before the decision is sent, claimants will get a telephone call from the DWP decision maker to explain the decision, see if they have any further medical evidence and tell them what their options are.
  • Claimants who are not entitled to ESA may appeal in the usual way, including where the WCA is failed – see below. Note that ESA is paid pending appeal against an actual WCA failure, but (unless the condition has significantly worsened or is new) not in most cases following refusal for failure to return the questionnaire or attend the medical.

What if the WCA is failed?

  • The claimant will not be entitled to ESA, and her/his existing award of IB/SDA/IS will terminate.
  • S/he will be able to appeal against the conversion decision saying that s/he has failed the WCA (or ask the DWP to revise it) under the usual rules. Claimants should be aware, though, that the time limit runs from the date of the conversion decision, not the date their existing award is terminated, which will not be until a few weeks later.
  • If they appeal against an actual WCA failure, they will be able to get ESA pending the appeal in the usual way – ie, at the assessment phase rate. If they had an existing award of IB or SDA, they will be able to get contributory ESA pending the appeal without having to satisfy the national insurance contribution conditions. Alternatively, they may claim jobseeker’s allowance (JSA) pending the appeal – ie, if they can satisfy the jobseeking conditions.

If ESA is awarded, how much can be awarded?

  • Claimants may be entitled both to contributory ESA and income-related ESA – eg, if they are transferred from IB topped up with IS.
  • Calculation of ESA entitlement uses the usual ESA amounts. As usual, ESA does not include amounts for children or dependant adults, age additions or a disability premium.
  • However, unlike in a new ESA claim, there is no assessment phase, so the claimant’s ESA includes the additional work-related activity component or support component from the start.4
  • The ESA may include a ‘transitional addition’.5This is added if the ESA would otherwise be worth less than the IB/SDA/IS the claimant is being transferred from.
  • To see if there should be a ‘transitional addition’, in transfers of IB/SDA to contributory ESA, the DWP compares the full value of the existing award, including dependant’s additions and age additions, with the ESA; in transfers of IS to income-related ESA, the DWP compares the IS applicable amount (not including amounts for children or housing costs) with the ESA applicable amount (also not including children or housing costs). In both cases, if the ESA is worth less, then the difference is made up by the inclusion of a transitional addition of ESA.
  • Transitional additions are not permanent. In effect, they are reduced by the amount of annual increases in ESA, and in any case, will not be paid after 5 April 2020. They may also be reduced before then by other changes in circumstance which increase ESA amounts (eg, becoming entitled to another premium in income-related ESA), and by the amount of child or adult dependant increases to IB/SDA where these applied before the transfer and certain relevant changes of circumstance (eg, child benefit stopping or separation from the adult dependant) occur. Although not affected by income, transitional additions are lost if ESA entitlement is lost altogether – eg, if the claimant fails the WCA.

What about other ESA rules, like work-focused interviews, tax and permitted work?

  • If the transfer results in an award of ESA, then most of the standard ESA rules apply to that award.6
  • An exception is that disabled or deaf students transferred from IS can still get ESA while in education, even if they are not entitled to disability living allowance.
  • Another exception is that claimants transferred from IB who had their private pension ignored will continue to have it ignored in their contributory ESA.
  • The claimant may be required to attend work-focused interviews.
  • ESA permitted work rules apply.
  • Contributory ESA is taxable, including any transitional addition – this will apply even if the claimant had been getting a non-taxable award of transitional long-term IB or SDA.

Rules and guidance

The main rules are contained in two set of Regulations: The Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) (No.2) Regulation 2010, SI No.1907; and the amendments made to them by The Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) (No.2) (Amendment) Regulations 2010, SI No.2430.

Currently, there is little official guidance available. Local authority staff administering housing benefit and council tax benefit have been issued with the following circulars: HB/CTB A16/2010; and HB/CTB A23/2010

Official information for advisers and for claimants can be found on the DWP website.

CPAG is looking for a test case where a claimant who was entitled to incapacity benefit is no longer entitled to employment and support allowance where the claimant passed the personal capability assessment, but failed the limited capability for work assessment. These could be claimants who met a number of low-scoring descriptors under the PCA which no longer exist under limited capability for work (LCW), deaf claimants who can lip read, or blind claimants with guide dogs, who would also have met the PCA but who would fail the LCW. We are looking for cases where the claimant is in receipt of incapacity benefit, rather than income support. CPAG would initially support the adviser in taking the case through the appeal process, which could be a lengthy procedure. If you have a case please contact us.

 


Please be aware that welfare rights law and guidance change frequently. Therefore older Bulletin articles may be out of date. Use keywords or the search function to find more recent material on this topic.

  • 1. ‘Grayling: initial reassessments of those on IB in Aberdeen and Burnley show large numbers of claimants with the potential to return to work’, DWP press release, 10 February 2011
  • 2. Sch 1 para 2 and Sch 2 para 2 Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) (No.2) Regulations 2010, SI No.1907
  • 3. Regs 6, 7 and 15
  • 4. Reg 8
  • 5. Regs 8 –12
  • 6. Regs 8 –12