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Proposed changes to Contribution-Based Employment and Support Allowance

The government wants to reduce the period for which Employment and Support Allowance (or ESA) can be paid in some circumstances. The change is part of the Welfare Reform Bill currently going through Parliament. If passed, it could become law by April 2012. Find out how this could affect your claim.

The proposed changes

The Welfare Reform Bill proposes two changes to contribution-based Employment and Support Allowance (ESA):

  • to limit to 12 months the period for which people in the Work Related Activity Group can receive contribution-based ESA 
  • to remove the special contribution criteria for ESA youth claimants

To see an up-to-date timeline of the progression of the bill on its way to becoming an Act of Law, follow the link below.

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Who will be affected if the law changes

If you have limited capability for work, you receive contribution-based ESA providing you have paid enough National Insurance contributions. Income-related ESA is different: this is paid to people depending on their income and savings.

If the Welfare Reform Bill is passed, you will be affected if you receive contribution-based ESA and are in the Work-Related Activity Group. You would only receive this benefit for a maximum of 12 months. 

There will be a safety net to support people with no other means of supporting themselves. Claimants in the Work Related Activity Group whose entitlement to contribution-based ESA ended after 12 months could get income-related ESA, if eligible.

For more information on ESA and other benefits for ill or injured people, follow the link below.

When would this change take effect?

The earliest this change can become law is April 2012.

How the 12 month period would be counted

Should the change in the law go ahead, the 12 months would start from the first day you were paid contribution-based ESA. Any time you have spent in the Support Group would be excluded, as would any gaps in your claim.

If you moved from Incapacity Benefit or Severe Disablement Allowance, the 12 months would start from the date your old benefit was changed to contribution-based ESA and you were placed in the Work Related Activity Group. Again, time spent in the Support Group would be excluded.

If you have already been receiving contribution-based ESA for 12 months and you are in the Work Related Activity Group, you would immediately lose entitlement.

If you stop being entitled to contribution-based ESA

If Parliament approves this change in the law, Jobcentre Plus will write to you before your contribution-based ESA ends, to tell you what you need to do.

Dependent on your income and savings you may become entitled to income-related ESA instead. You will not need to make a new claim, but Jobcentre Plus may have to ask you for more information. They will write to you before your benefit ends to tell you what to do to be considered for this.

Depending on your circumstances you may be entitled to other benefits. For benefit advice, please follow the link below to the online benefits adviser.

If this change takes place, people who receive income-related ESA and contribution-based ESA will lose the contributory element. The income-related element of your ESA will be adjusted to take this into account and will continue.

Claimants living abroad

Claimants living abroad and receiving contribution-based ESA will also be affected if this proposed change goes ahead. However, unlike people living in the United Kingdom, they will not be able to claim income-related Employment and Support Allowance if their contribution-based ESA ceases.

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