Employment Support Allowance

Employment and Support Allowance (ESA) is a new benefit that has replaced Incapacity Benefit (IB) and Income Support (IS) paid on the grounds of ill-health or disability.  Introduced from 27th October 2008.

What is Employment Support Allowance?

ESA will have a new structure that has both a contributory element and a means-tested element, very similar to Incapacity Benefit (IB) and Income Support (IS) paid previously or now for some with transitional protection.

The test of entitlement to the contributory element will be similar to that currently used for Incapacity Benefit (IB), i.e. sufficient national insurance contributions paid.

The test of entitlement for the means-tested element will be similar to that currently used for Income Support (IS) now i.e. a means tested / income-based assessment.

ESA Rates

There will be a 13-week assessment phase for all new ESA claimants. During this period, claimants aged over 25 years will be paid an ‘assessment phase’ rate of ESA, equivalent to the weekly rate of Jobseekers Allowance payable for people aged over 25 (Currently £73.10 wkly). For those under 25, a reduced weekly rate of ESA will be payable, again in line with Jobseekers Allowance rates (£57.90 wkly the under 25 year old rate).

After the 13-week assessment phase, there will be an additional element payable on top of the basic rate of ESA. Claimants placed in the ‘support group’ will receive a slightly higher element than claimants in the ‘work-related activity group’. The support component is worth £36.20 per week and the work-related activity component is worth £29.05 per week. There are no increases in these components for couples.

Claimants under 25 years that have completed the 13-week assessment phase will receive the full basic ESA rate rather than the reduced amounts payable in the assessment phase referred to above.

For claimants with partners additions are still available under the new means tested ESA system, as well as various premiums such as the Severe Disability Premium, Pensioner Premium, Carer Premium and Enhanced Disability Premium, currently payable with Income Support (IS), .

All new ESA claimants will have to serve the 13-week assessment phase, before moving onto the higher rates of ESA, regardless of their circumstances, except in cases where the claimant has a terminal illness or recieving treatment for Cancer they will go straight to the main phase rates.

For claimants coming onto ESA from Statutory Sick Pay (SSP), and new ESA claimants who also receive Disability Living Allowance, this appears particularly harsh. It is possible that such claimants could receive less benefit than they would currently receive on Incapacity Benefit (IB) and Income Support (IS), due to the difference in rates between Statutory Sick Pay (SSP) and assessment phase ESA, and the lack of an equivalent to the disability premium in ESA.