A look at the DWP review process, currently just beginning, to check for historic underpayments of ESA and an explanation of new mysterious letters about a telephone appointment with DWP.
Some visitors to Maggie’s Centres have been puzzling about a new letter coming from ESA asking for a telephone conversation to check about possible entitlement to Income-related ESA. For many, benefit issues have long seemed settled and there can be anxieties about what this new bolt out of the blue may signify.
Might it be related to some ending of their entitlement to Contributory ESA which they have heard can happen? Is it a prelude to a new health assessment under ESA’s Work Capability Assessment.
However, in this case the outcome of a one off review process underway may be less worrying, as in effect it is simply the phone call mentioned to check if either your overall ESA stays the same or you might be entitled to some extra money which was mistakenly not awarded to you in the past.
1. Why the review exercise?
The issue relates to the DWP failing to fully check on people's entitlement when they moved over from the "old" system for people who were too unwell to work - of Incapacity benefit ( IB) and Income Support ( IS) - for sickness - to the new one that of Employment and Support Allowance (ESA). This was mostly done between 2011 and 2014, although there are still some 100,000 awaiting the switch.
The DWP realised their systemic problem back in 2013. Until then people who switched over - and new claims for ESA - may not have been fully checked. Matters should have got better since, but it is always worth double-checking your entitlement, regardless of when you started claiming ESA.
Some 330,000 people now need to be re-checked by the DWP , from which they expect to find some 80,000 people will have been underpaid , in some cases by several thousand pounds.
2. The two sort of ESA and how they relate
ESA comes in two types:
- Contributory ESA equating roughly to the old non-means tested Incapacity Benefit (IB) paid to you as an individual based on your National Insurance (NI) contributions, regardless of most other income or what your partner is up to - financially speaking
- Income-related ESA which largely replaced the then entirely separate Income Support (IS) - for sickness. IS continues but for e.g carers, some lone parents and for some who are unwell but getting Statutory Sick Pay from an employer. Both the old and new of this "means tested" variation of help when unwell are affected by other income and savings that you - and any partner - may have.
At the time, the DWP forgot to double-check as to whether people moving over from the old IB to the new Contributory ESA might also have qualified for a top up from the new Income-related ESA. They largely have done since they realised in 2013 . However, now the courts have told them they must carry out a review exercise to check if anyone lost out before then.
It may help to explore how the two types of benefits relate to each other . Sometimes you might be entitled to either /or . So it might have been either Incapacity benefit or Income Support in the past and either Contributory or Income-related ESA now . However, at other times you may get help from both; and that's essentially where the DWP went wrong on this occasion
2.1 When is it one or the other type ?
Sometimes, the a means tested benefit like Income-related ESA is purely there as a backup alternative to those who can't get Contributory ESA. That might happen e.g.
- because some people don't have the right National Insurance (NI) contributions to get Contributory ESA; or
- because their entitlement to Contributory ESA has timed out. This only affects those in the "work related activity group" of ESA after a year, and not the majority of people affected by cancer who may be in the other Support group.
So for many then, Income-related ESA might come into play instead of Contributory ESA
The basic amounts within each type of ESA are identical, so what then is the advantage of having paid all those NI contributions over the years?
For some, it may make little difference. Any Contributory ESA might in their case be exactly the same as Income-related ESA and it is of no particular importance as to which one it happens to be.
For others it can be crucial that they theirs is Contributory ESA. Because that means that they can continue to receive it regardless of ongoing sick pay from work, partner’s income, joint savings . You can still get your Contributory ESA paid regardless. Had your entitlement only been the back-up of Income-related ESA, then the additional financial assessment might have left you with little or no benefit due.
2.2 But sometimes you can get both
Some people who get their Contributory ESA from their past NI contributions, may not have much other income coming in. They may rely mainly on their ESA and perhaps other benefits (such as PIP, or Housing Benefit) to get by. In those circumstances, Income-related ESA can also act as a top-up to their Contributory ESA.
That's because Income-related ESA has some additional amounts or 'premiums' that Contributory ESA doesn't.
Now that could apply under the old system too. Many people didn't realise that extra premiums such as the various disability and carers premiums nor extra amounts for a partner without income or mortgage interest might have between entitled them to a top up from Income Support.
Back in the day though, Income Support and Incapacity Benefit were two entirely separate benefits, so it was always up to you to make a separate claim or check out potential entitlement. If you didn't do so and lost out, the DWP had and has no duty to advise you on the best way forward. Their responsibility is simply to process any claims you choose to make.
In practise, in those days of far more human contact and wider staff knowledge, many kindly and experienced DWP staff might well do just that if they came across a customer who was apparently under claiming; going that extra mile, more from a personal sense of care and commitment than a departmental one.
Interestingly, the new Social security agency that will run devolved benefits in Scotland has just such a general duty to advise as part of a a wider agenda of ' dignity, fairness and responsibility' . It will be interesting to see if people notice a general difference in dealings with this new agency for devolved benefits with such obligations and the DWP which will continue to run other benefits and which does not.
3. So what changed under ESA?
There were several changes that made the potential for top ups increase more common and made things more directly the DWP's responsibility, under ESA:
- the two previously entirely separate benefits became one benefit for people too unwell to work . That means the DWP do now need to consider entitlement to both sorts of ESA as people switched over in order to do their core job of processing an ESA claims properly.
- ESA had a new concept of dividing the unwell into two groups: the Support Group and the Work Related Activity Group.
- the previous ' enhanced disability premium' (EDP) present under both old and new systems widened in scope under ESA. Under other benefits such as Income support and JSA this premium only applies to people who receive the highest rate of DLA Care / enhanced rate PIP Daily Living. However, under ESA, the premium also extends to all those in the ESA Support Group. It's worth an extra £16.40 a week in the sums at current rates - or £22 if you are one of a couple.
So that means that quite a few more people could be entitled to a weekly top up to their Contributory ESA from Income-related ESA than might have been the case under the old system.
And because under ESA it is all part of the same benefit, the DWP did - and does - now have a duty to check this, in order to process the whole ESA claim correctly.
There are other premiums too, that people can miss out on, such as the far more valuable ' severe disability premium' (SDP) .
However, the focus of this review exercise is on the systemic failure to consider the' enhanced disability premium' (EDP), so it will be interesting to see if DWP will ask anything around any other premiums while they are at it. If you have missed out on other premiums, there is other action that an adviser can take to get your correct entitlement in payment.
4. The current review exercise
So these letters relate to a telephone check by the DWP particularly focussed on the missing EDP, that has affected many people under ESA.
Not everyone who potentially could have had that premium included in their sums will actually have missed out in practise. They might not have had sums done – or EDPs included in them - but any amount actually due might well have been wiped out in any overall financial assessment of entitlement to Income-related ESA.
The problem was that the DWP, used to a past world of two totally different benefits , was routinely failing to check on the need to do these sums or to do them and pay any additional amount due. It is estimated that some 80,000 have lost out as a result.
However in order to find out who those people are, the DWP are going to need to check around 330,000 ESA claims. And that is why the letter and follow up calls are popping through letter boxes across the UK.
So these letters and calls are not starting up a new re-assessment process nor replacing existing settled Contributory ESA entitlement with an Income-related ESA one. Such processes (and letters) will carry on as part of the routine of ongoing ESA claims, but this is not what this one off review is about.
This process will result in either:
- no change for you at all in your ongoing ESA ; or
- that you may be owed a small weekly amount going back quite a way; which could amount to a not inconsiderable amount over time; thousands of pounds in some cases.
5. How far back will the DWP pay?
But just how far back will the back-payments go? Will people get the full amount that they were due?
The DWP’s current position is that people affected will be backpaid to the most recent of either:
- the date they switched over to ESA; or
- the 21st October 2014, which was the date of the legal ruling telling them they had to undertake the review.
In most cases, people switched to ESA between 2011 and 2014, so under this view, backpayments will only go back as far as the 21st October 2014.
The logic for this is that the general rule is that where the law changes – e.g. as a result of a new Court ruling – then any arrears that arise only are due back to the date when the law changed.
However, the one of the main advice groups – CPAG are arguing that this limitation does not apply as it is not actually a change in the interpretation or meaning of the law. Essentially all the Court was doing before was telling the DWP that they must properly implement the law as it stood at the time.
If the new Court judgement agrees, then the actual change is not a change in the law, but a simple correction of an official error by the DWP, that requires them to compensate people right back to the date when people first lost out.
And if it is just simply an official error then the DWP are bound to make good the error in full i.e all the way back to the date from which someone lost out simply due to the DWP ‘s failure to implement the law as it stood at the time. The Courts then are now being asked to make a second ruling on how far back the payments go..
However, in the meantime, he review exercise can carry on regardless - as this timing issue doesn't get in the way of working out who has been affected. The DWP can carry on with checking out who has been affected, while awaiting the new Court ruling on the time ( and amount) involved.
Summary
There is nothing to be alarmed about in these particular letters. They are not like other routine ones about possible expiry of Contributory ESA nor a prelude to a fresh ESA health re-assessment, which many recipients may have expected to be all over and done with anyway.
This is essentially a one off exercise that may mean no change at all in your current ESA or may mean you are owed a pretty sum, even if we don’t yet know know how pretty it will turn out to be.
Whether you get do receive anything, will though depend on your financial circumstances at the time that you switched to ESA and any significant change since.
It is always worth checking out whether you are getting the full amount of ESA to which you are entitled. And come to that any other benefits that you might either be missing out on completely or not be receiving your full entitlement.
It may take a while before this particular exercise is completed and all backpayments due are sorted. However, in the meantime, please don't let this particular letter and telephone appointment cause you any undue alarm.
This blog was originally written by Tom April 2018