A friend has just received an ESA50 and I wondered if ESA, unlike Incapacity Benefit (which he now receives), was taxable. From my own amateur attempts on the internet, it seems to me that in the case of means-testing and tax:
(a)There are two types of ESA: One is Income-related ESA which isn't taxable, and the second type, Contributory ESA, which is taxable.
Furthermore, (b)Contributory ESA (paid if claimant has made enough national insurance contributions) is limited to 365 days (now this is the bit that amazed me). In the case of income-related ESA, this is not paid if savings exceed £16,000.
So unlike Incap. Benefit which is not taxable or means-tested, either ESA will be either taxable or will be means-tested.
So do I understand correctly that if someone has over £16,000 capital and is awarded Contributory ESA, this will only last one year maximum as it will then become Income-based ESA and this will not be due in view of the £16000+ savings? Do I understand correctly?
So anyone now on Incap. Benefit. with over £16,000 capital, if they manage to get through all the obstacles and hurdles now placed in front of him/her to get Support-Group ESA, will still only get ESA for a year?
Secondly, I don't understand how these two types of ESA 'tie in' with the two types of ESA usually discussed - the Work Related and the Support Group. Are there then four groups of ESA?
Thanks
(a)There are two types of ESA: One is Income-related ESA which isn't taxable, and the second type, Contributory ESA, which is taxable.
Furthermore, (b)Contributory ESA (paid if claimant has made enough national insurance contributions) is limited to 365 days (now this is the bit that amazed me). In the case of income-related ESA, this is not paid if savings exceed £16,000.
So unlike Incap. Benefit which is not taxable or means-tested, either ESA will be either taxable or will be means-tested.
So do I understand correctly that if someone has over £16,000 capital and is awarded Contributory ESA, this will only last one year maximum as it will then become Income-based ESA and this will not be due in view of the £16000+ savings? Do I understand correctly?
So anyone now on Incap. Benefit. with over £16,000 capital, if they manage to get through all the obstacles and hurdles now placed in front of him/her to get Support-Group ESA, will still only get ESA for a year?
Secondly, I don't understand how these two types of ESA 'tie in' with the two types of ESA usually discussed - the Work Related and the Support Group. Are there then four groups of ESA?
Thanks