Your capital and any capital belonging to your partner is taken into account when calculating entitlement to income related Employment and Support Allowance.
Employment and Support Allowance page index
You will not be entitled to income-related Employment Support Allowance (ESA IR) if your capital exceeds £16000. If you have capital between £6000 and £16000 then you will be treated as having tariff income.
Tariff income is calculated by adding £1 per week for every £250 (or part of £250) between £6000 and £16000.
The lower limit is raised to £ 10000 if you a living permanently in-
and you require personal care that is provided by that home
Capital is defined as-
A payment is also classed as capital if it is not made or due to be made regularly and if it is made without reference to a period.
You or your partner must be the beneficial owner of the capital for it to be included in the calculation. The beneficial owner is usually the legal owner unless the legal owner is holding it on trust for another person or persons.
Business Assets
If you or your partner own all or some of the business assets and are engaged in the business as a self-employed earner then the assets of the business will be disregarded indefinitely.
Any business assets acquired by someone receiving assistance under the self employment option of the New Deal will also be disregarded.
If you or your partner have stopped working in the business then the assets of that business will be disregarded for a reasonable period to allow them to be sold or otherwise disposed of.
If you or your partner are directors in a limited company then your shares in that company and any capital that you have lent to the company will be included
Joint accounts
If you or your partner have joint bank, building society or post office accounts with others then only that part of the account in which you or your partner have a beneficial interest will be treated as capital. The DWP gives the example of a claimant who has a joint bank account with his mother. He has deposited a £2000 legacy in the account and his mother has deposited £10400, the only withdrawals from the account have been used to pay the mother's care home fees. In this instance only £2000 would be included.
Capital that is disregarded
Your home
Any dwelling which you or your partner own that is occupied as your home is disregarded.
Your home is defined as the place where you-
The value of other properties bought as an investment opportunity, a weekend retreat or a country cottage will not be disregarded.
The value of your home is disregarded for 26 weeks if you stopped living there because of estrangement, divorce or dissolution of a civil marriage. The disregard is for an indefinite period if the home is still occupied by your former partner and he or she is a lone parent.
Any grant made to someone by a housing authority of local under housing law to assist with either the purchase of your home or repairs and alterations to make the property fit to live in is disregarded for 26 weeks. This may be extended if it takes longer for the purchases or repairs to complete.
Deposits paid to a housing association are indefinitely disregarded if the deposit is a condition of living in your home.
Deposits removed from a housing association will be disregarded for 26 weeks if the money is to be used to buy another home.
Money from the sale of a home will be disregarded for 26 weeks if that money is going to be used to buy another home. This period may be extended if you can show that you haven't yet found a suitable property or that the sale has not yet been completed.
Any money paid to you or your partner because of damage or loss to your home or personal possessions is disregarded for 26 weeks if you can show that you intend to use the money to make good the loss or damage. The period can be extended if the DWP considers it reasonable to do so.
Money received by way of a loan, grant or gift for carrying out essential repairs and improvements on your home will be disregarded for 26 weeks. This period may be extended if the repairs and improvents take longer to complete.
The value of premises that you have bought but have not yet moved into will be disregarded for 26 weeks or longer if this is thought to be reasonable.
The value of premises which you are taking steps to get possession of are disregarded for 26 weeks if you can show that you-
The 26 week period starts from the point at which you took legal advice or started prceedings. The period may be extended if legal action is still taking place or there is a good reason why you have not started to live in the premises.
The value of premises which need essential repairs or alterations to make them habitable are disregarded for 26 weeks. The disregard period will start from the date you first take steps to get the work done- this may when you ask about obtaining finance or planning permission or when you first contact an architect or someone to do the work. The 26 weeks can be extended if you can show that it is taking longer than this to get the work done.
The value of a property that you or your partner are trying to sell are disregarded for 26 weeks if it can be shown that you are taking reasonable steps to sell it.
"Reasonable steps" are said to include-
The value of the premises may be disregarded for longer than 26 weeks if the property has not been sold. The period will start from when you first advertised the property or contacted an estate agent or solicitor.
The value of a house or flat is disregarded indefinitely if it is occupied by your partner or relative if they are aged over 60 or are incapacitated or if they are occupied by your former partner who is not estranged, divorced or out of a civil partnership. The Decision Makers Guide notes that "a claimant and former partner who are separated are not necessarily estranged."
There is no legal definition of the term "incapacitated". Your relative or partner will be classed as incapacitated if he or she is receiving (or is entitled to receive) any of the main disability benefits.
Other capital that is indefinitely disregarded
The surrender value of any life insurance policy is disregarded indefinitely. This also applies to investments which include some life insurance if the agreement states how payment on death is worked out.
Payments made to a juror or witness for attending court is disregarded indefinitely but not if the payment is to compensate for loss of earnings or benefit.
The value of a trust where the trust's funds come from a payment made because of personal injury and the right to receive payment from that trust are indefinitely disregarded. A lump-sum payment made because of personal injury is disregarded for 52 weeks- this is to give you sufficient time to set up a trust.
A payment in kind made is disregarded indefinitely if it is made by-
Any payments of capital made to you or your partner by the local authority under specific child care legislation is disregarded indefinitely.
Any payments (except for a government training allowance) made under the Disabled Persons (Employment) Act 1944 are disregarded indefinitely. These include the business on own account scheme, the personal reader service scheme and the fares to work scheme. Payments by your local authority under the Blind Homeworker's Scheme are also disregarded indefinitely.
Any payments made to you as a holder of either the George Cross or the Victoria Cross are disregarded in definitely.
Direct payments made by a local authority in lieu of community care services are dissregarded indefinitely.
Payments made to you or your partner under the Supporting People programme are disregarded indefinitely. These are payments made to develop or sustain the capacity of people to live independently
The value of the right to receive a personal pension and any funds held under a personal pension scheme is disregarded indefinitely. An annuity contract or trust scheme approved under tax law also counts as a personal pension scheme.
Personal possessions such as clothing, jewellry and cars are disregarded indefinitely unless you or your partner has bought these items deliberately to reduce the amount of capital you have in order to qualify for an income-related benefit.
A Social Fund payment is disregrded indefinitely. This does not apply to payments made by the European Social Fund.
A tax refund deducted on loan interest is disregarded indefinitely if the loan is used to buy your home or to carry out repairs and improvements to the home.
One-off payments from the Independent Living Fund (2006) are disregarded indefinitely.
The value of the right to receive rent is disregarded except where you have a future interest in the property.
One-off payments from any of the following Trusts are disregarded from the date of payment until two years after the date of death of the person who got the money from the Trust-
Payments of £10,000 made to a person (or their partner or their deceased partner or their partner's deceeased partner) because of imprisonment or internment by the Japanese during World War 2 are disregarded indefinitely.
Compensation payments made by the Government-funded trust to sufferers of variant Creutzfeldt-Jakob disease and their partners are disregarded indefinitely.
Any education maintenance allowance payment that is paid to you or your dependent child is disregarded indefinitely
Capital that is disregarded for 52 weeks
Payments of arrears of the following benefits are disregarded for 52 weeks after they are received-
Arrears and concessionary payments of £5000 or more with regard to any of the above benefits are disregarded for 52 weeks from when the payment was made or, for those already receiving income related ESA, the payment is disregarded for the remaining period of the award.
Payments of arrears made to certain war widows and surviving civil partners are disregarded for 52 weeks.
Payments and repayments of NHs travel costs and other charges are disregarded for 52 weeks. This applies to a payment or repayment for, travel costs to and from hospital for treatment as an in-patient or out patient, prescription charges, sight tests, glasses, dental treatment, wigs and fabric supports.
A payment in place of milk tokens, vistamins or healthy start vouchers is disregarded for 52 weeks.
A payment made to cover the cost of a visit to someone in prison is disregarded for 52 weeks.
A payment made because of the reduction of council tax is disregarded for 52 weeks.
Payments that are payments of capital made under employment and training law are disregarded for 52 weeks. These payments include-
Capital disregarded for 26 weeks
A payment of a sports award is disregarded for 26 weeks from the date on which payment was made. This disregard does not apply to any amount paid for-
