What happens if...

...someone who is ill, on IS and top DLA comes in to a lot of money. Obviously they can no longer claim IS but are they still liable for the ESA tests or are they simply no longer a claimant?

Also, when their money finally runs out, do they need to start their claim again from the very start, even though they are at present considered very disabled? It's so hard to understand all the rules!

Shirley

If someone is on just IS on incapacity grounds and they come into money, then depending on how much it is, they may lose their IS. They then would have to live off their capital. When they run out of money, they would have to claim ESA. There would be no medical tests until they make a fresh claim.

If they are on IS and IB, they can continue to claim IB because that is not means-tested, although they would lose the IS.

Hi,

Although many 'ifs' and 'buts' in the scenario, firstly people are not forced to claim benefits. If one has enough income/capital to live on then they can do this. There would however be a reduction in future state pension due to no NI contrbutions or credits being made, hence alternative arrangements may need to be made (I am not a financial adviser though - one would probably need one).

Looking at your example situation, DLA is unaffected (providing needs etc don't change) but IS would cease if over the capital threshold. If the person is currently in receipt of IS (by way of not having made enough NI contrbutions to claim IB) then unless that person gets employment for a period which then satisfies the relevant NI contributions which may allow them to in future claim Contribution based ESA, then they would in the future be restricted to claiming Income Related ESA.

Hence their 'capital pot' would have to run down to the level at which they can then claim Income Related ESA. However one must be wary of the intentional disposal of capital rules, ie you cannot just give the money away etc in order to claim benefit.

That is a short summary, but situations may, can and do vary.

Pete


Edit, Sorry Survivor, your post wasn't there when I started typing!!

Pete

is it worth saying.. if the money is 'compensation' then all benefit(s )previously claimed has to be paid back, including DLA, that is what happened to me. It was very confusing paying back benefit whilst still entitled and in receipt.

Hi

I don't know much about this area of the benefit system, but sadly, I had a friend who won a three-year stressful legal battle to get compensation for an injury suffered at work.

He received £8000, but about £6500 was clawed back by the DWP to cover sickness benefits he received during that time as a result of his injury. Most of the remainder was spent on petrol and other expenses incurred in the dispute.

He felt it wasn't worth all the stress and wouldn't have bothered if he knew how little he would end up with.

Derek

Mine was a five year legal battle, after a head on rta which left me with terrible injuries, im still having operations 10 years later. I had to pay back £98,000 benefit including dla, which i assumed wrongly, was paid because i was disabled. The strange part was sending the cheque off and getting the next months dla in my bank account at the same time. The compensation never covered the final medical bills and i was left in debt. losing my job, home and my child to boot!! It certainly wasnt worth the fight or my sanity.