Judith Paterson looks at changes to housing benefit (HB) and council tax benefit (CTB) applicable amounts for employment and support allowance (ESA) claimants and considers some better-off issues.
With the introduction of employment and support allowance on 27 October 2008, some housing benefit and council tax benefit rules have changed to accommodate the new structure. In brief, ESA is paid at a basic rate during an assessment phase at the start of the claim, and thereafter includes a work-related activity component for those who have 'limited capability for work' and comply with required activity or a support component for those who have 'limited capability for work-related activity'. One of the key changes in HB/CTB (for claimants under 60) is the inclusion of these components in the applicable amount. However, the disability premium and enhanced disability premium remain. This article looks at which applies and suggests ways to maximise entitlement. This is relevant to those on contributory ESA (people on income-related ESA are automatically passported to maximum HB/CTB).
Who is entitled to a component1
If you get a work-related activity component or support component in ESA, you are also entitled to the same component in HB/CTB. A couple is entitled to a component if one or both of them are on ESA with a component included. But if both are on ESA, only one component is included in HB/CTB, the one that relates to the HB/CTB claimant's ESA entitlement. There is no couple rate (as there is with the disability premium)
If you claim ESA but are not entitled to it, because, for instance, you do not have enough National Insurance (NI) contributions or your income is too high, you can nevertheless be assessed for the purposes of HB/CTB and NI credits. In this case, HB/CTB includes the relevant component at the end of the assessment phase.
However, you cannot get a component and a disability premium included together. See below if there is entitlement to both.
If your ESA work-related activity component is reduced because of a sanction, HB/CTB continues to include the full amount of the component and the full, unsanctioned amount of the contributory ESA is included as income.2 In other words, there is no change to HB/CTB.
The component is included in HB/CTB to coincide with the start of entitlement to the component in ESA. This is usually when the 13-week assessment phase is over. But if the ESA component is included earlier (e.g., because of a linked claim), then HB/CTB follows suit. If the ESA component starts late because of a delayed assessment and is backdated, then the HB/CTB component is also backdated.3
Who is entitled to a disability premium
The usual qualifying conditions for a disability premium remain. In brief, it is included if a claimant or partner gets a qualifying benefit, or if the claimant is 'incapable of work' for 52 weeks (i.e., under the old incapacity benefit test, no longer available to most new claimants). What is new is a rule aimed at preventing a premium being included as well as a component (see below).
Premium or component?
There are two rules.
1. If you are a HB/CTB claimant with 'limited capability for work', you cannot get a disability premium in HB/CTB.4Claimants are treated as having limited capability for work from the start of the ESA claim so someone who would otherwise be entitled to a disability premium will lose it immediately.
2. If you are entitled to a disability premium, you cannot get a component in HB/CTB.5This rule only applies where entitlement to the disability premium survives a claim to ESA. For example, a single claimant on DLA who gets a disability premium would lose the premium when s/he claimed ESA, as explained above. On the other hand, a couple would keep the premium, even if the HB/CTB claimant's partner claimed ESA (because the rule above that stops a disability premium only applies when the HB/CTB claimant makes the ESA claim). This gives scope for planning which one claims to maximise entitlement (see below).
Enhanced disability premium
To the usual qualifying condition for the enhanced disability premium (i.e., the claimant or partner gets disability living allowance (DLA) highest rate care component) is added a new qualifying route; that the claimant gets ESA with a support component (or is assessed as satisfying the conditions for a support component).6
- A partner who gets ESA with a support component should switch to be the HB/CTB claimant to get an enhanced disability premium.
Example: Dermot is an HB claimant. He and his partner, Emma, both get ESA. His ESA includes a work-related activity component. Her ESA includes a support component. Dermot's HB includes a work-related activity component (£24). They decide to switch claimants. Emma is now the HB claimant. HB now includes a support component (£29) and an enhanced disability premium at the couple rate (£18.15).
- If one partner claims ESA and the couple also qualifies for a disability premium, the partner who does not get ESA should be the HB/CTB claimant to get a disability premium at the couple rate. Switch claimants as soon as possible as entitlement to the disability premium stops as soon as ESA is claimed.
Example: Bron is an HB claimant. She claimed ESA in November and gets a work-related activity component from February. Her partner, Casey, gets DLA. The disability premium stops from November and HB includes a work-related activity component from February. They switch so that Casey is the HB claimant. Her HB now includes a disability premium at the couple rate (£36.85).
- A support component with an enhanced disability premium is worth more than a couple rate of disability premium. A couple who can satisfy conditions for both can maximise entitlement by getting the disability premium included during the assessment phase and the support component/enhanced disability premium included thereafter. Switch HB/CTB claimants from week 14 of the ESA claim when the ESA claimant has been awarded a support component.
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