I am very grateful to those people who have raised questions about ESA and means-testing and taxation and to those who have been kind enough to answer them as I have been wondering about these issues. Much appreciated.
My dad, ahged 62, has been on Incapacity Benefit (previously IVB) since 1987 when his health deteriorated dramatically. He receives a taxable pension from his old employer due to his ill-health (although this is not taxed as it is below taxable threshold). A few years ago, he sold his house as he was so ill and moved into a bedsit type flat as it was easier for him to look after and keep warm in: through this he has capital over £16000.
In sum, because of his works pension and capital, he would be excluded from any means-tested benefit.
I assume he will soon receive an ESA50. Now, if he succeeds in making it to the ESA support group, I understand from the answers left here that the ESA will not be means-tested, but will be taxed (the ESA will take him over the taxable threshold). So, in effect he will be worst off than he is now as he will be paying tax on/because of the ESA while he pays no tax now on his Incapacity Benefit.
I am surprised at this as I thought the Support Group was not supposed to leave anyone worse off. Have I misunderstood?
Mark:silenced:
My dad, ahged 62, has been on Incapacity Benefit (previously IVB) since 1987 when his health deteriorated dramatically. He receives a taxable pension from his old employer due to his ill-health (although this is not taxed as it is below taxable threshold). A few years ago, he sold his house as he was so ill and moved into a bedsit type flat as it was easier for him to look after and keep warm in: through this he has capital over £16000.
In sum, because of his works pension and capital, he would be excluded from any means-tested benefit.
I assume he will soon receive an ESA50. Now, if he succeeds in making it to the ESA support group, I understand from the answers left here that the ESA will not be means-tested, but will be taxed (the ESA will take him over the taxable threshold). So, in effect he will be worst off than he is now as he will be paying tax on/because of the ESA while he pays no tax now on his Incapacity Benefit.
I am surprised at this as I thought the Support Group was not supposed to leave anyone worse off. Have I misunderstood?
Mark:silenced: