Employment Support Allowance Guide
Employment support allowance is available to individuals who have a disability or health condition that impacts their ability to work.
Paid by the department for work and pensions (DWP) every two weeks you can be eligible for the employment support allowance if you are self employed, employed under PAYE, unemployed or a student.
The employment support allowance or ESA for short provides the following benefits:
- Financial assistance to cover living expenses if you are unable to work.
- Support to help you return to work if you are capable of doing so.
There are two categories of ESA:
- The most common type of ESA is the new style or contributory ESA (referred to as new style ESA if applied for after universal credit was introduced in your region, or contributory ESA if applied for before).
- Income related ESA was around before universal credit and isn’t open for new applications moving forward. Existing claims for income related ESA are typically maintained by the DWP.
The amount of ESA you can claim will vary based on what stage you are at in the application process and other factors such as your age and ability to re-enter the workforce.
What is new style employment and support allowance?
People claiming ESA for the first time (or reapplying) will normally need to apply for the new style employment and support allowance.
The new style version of ESA does not require a means test and it’s possible to receive both new style ESA and universal credit simultaneously.
As part of the qualifying process you will need complete the work capability assessment which consists of two elements called the limited capability for work assessment and the limited capability for work-related activities assessment.
Special ESA rules apply with a fast tracked service for people who have a terminal illness.
What is contribution based ESA?
Contribution based earning support allowance is essentially the same in many ways as new style ESA with the main difference being that a claim for contribution based ESA was made before the universal credit system existed.
Live claims for contribution based ESA can continue as normal because they were applied for before universal credit started.
What is income related ESA?
Since the implementation of universal credit, it is typically no longer possible to apply for income related ESA.
If you are already receiving income related ESA you will continue to receive these payments as long as you still meet the qualifying criteria.
It’s expected that individuals who are currently receiving income related ESA will be transitioned by the DWP to universal credit over the coming years.
Am I eligible to claim employment support allowance?
To be eligible for ESA, the following criteria must be met:
You are experiencing challenges in employment due to illness or disability and are classed by the DWP as having ‘limited capability for work’.
- You must be 16 years old or above.
- You must be below the state pension age.
- You must reside in England, Wales, or Scotland.
Other ESA criteria includes:
Typically you need to fulfil specific national insurance requirements for two tax years. For example the tax years of 2022-23 and 2023-24 will be used for an application made in the 24/25 tax year.
You will satisfy the national insurance conditions if you meet either of the following:
- You have complete years of NI contributions from employment (class 1 NI) or self-employment (class 2 NI) for both tax years.
- You have one full year of NI contributions from employment or self employment and the other full year from national insurance credits.
How much is employment support allowance?
The DWP has a different rates based on your age and whether you are in the ESA assessment phase of your application.
ESA assessment rates:
During the evaluation of your claim, you will receive the ‘assessment rate’ for a period of 13 weeks.
The amount you will receive depends on your age:
- If you are under 25, you can receive up to £71.70 per week.
- If you are 25 or older, you can receive up to £90.50 per week.
For claims that have an assessment phase that takes longer than 13 weeks you will continue to receive the ‘assessment rate’ until a decision is made or until your ESA is scheduled to end.
If it is determined that you are owed any money after the initial 13-week period your ESA payments may be backdated using the rates below.
ESA rates after the assessment phase:
Once a successful ESA assessment is complete, you will be assigned to one of two categories if you qualify for ESA.
If there is a possibility of you returning to work in the future, you will be placed in the work-related activity group.
Alternatively, if you are unable to work, you will be placed in the support group.
The financial support you receive will depend on your group placement:
- If you are in the work-related activity group, you may receive up to £90.50 per week.
- If you are in the support group, you may receive up to £138.20 per week.
For how long can I claim ESA?
If you belong to the work-related activity group, both the ‘New style’ and contribution based ESA will last for a duration of 365 days.
There is no specific time limit for those in the support group or receiving income related ESA.
Is ESA taxed by HMRC?
New style contributions based ESA is treated by HMRC as taxable income and taxed accordingly in the tax year it is received.
The income tax you need to pay (if any) will differ depending on your total taxable income. This could include income from additional sources like an occupational pension for example.
Individuals that complete a self assessment tax return and who receive taxable ESA should use the P60(IB), P45(IB), P60(U) or P45(U) provided by the DWP to enter the overall taxable amount of ESA in box 13, and any deducted tax from your payments in box 14 of their tax return.
Income related ESA which is means tested is not subject to income tax.
How do I claim employment and support allowance?
To claim employment and support allowance you can submit your application for ESA online or by phone.
You will need some information to start the process including:
- Your national insurance (NINO) number.
- If you are working details of your income.
- If you are unable to work from more than seven working days in a row due to a health condition or disability a fit note from a healthcare professional for example your GP.
- If you are claiming it the date your statutory sick pay (SSP) ends.
- The name and address of your doctor.
- Your preferred bank or building society account number and sort code.
ESA claim by phone:
To make a claim for ESA by phone you should call the Jobcentre Plus new claims helpline on: 0800 055 6688.
After submitting your ESA application the DWP will reach out to you within 10 working days and if you meet the eligibility criteria they will arrange an appointment with you.
This appointment will usually be conducted over the phone with a work coach from your local Jobcentre Plus office.
During the appointment you will be required to:
- Provide medical evidence to support your claim.
- Explain how your illness or disability impacts your ability to work.
- Agree to inform your local Jobcentre Plus if there are any changes in your circumstances.
Once you have submitted your claim, you will receive information regarding whether you are required to undergo a ‘Work Capability Assessment’ and the specific ESA group in which you will be placed.
The purpose of a work capability assessment is to determine the extent to which your illness or disability impacts your ability to work.
During the appointment, your work coach will provide you with information on how to proceed with obtaining New Style ESA which include establishing an agreement called a “Claimant Commitment”.
If you disagree with a decision you can challenge a decision about your ESA claim you can ask for a ‘mandatory reconsideration’ which should be made within one month of the decision you would like reviewed.
ESA work related and support activity groups
If you qualify for ESA you will be assigned to one of two groups:
The work related activity group lasts for 365 days and means you are currently unable to work, but can engage in activities that prepare you for future employment like creating a curriculum vitae (CV).
If you are placed in the work-related activity group, it is mandatory to attend regular meetings with a work coach. They will assist you in enhancing your skills and creating a CV to support your return to work.
The support group can last indefinitely and means you are currently unable to work and are not expected to prepare for future employment.
If you are placed in the support group you are not required to attend interviews but you can inform your work coach if you would like to participate in work-related activities.
Can you work when claiming ESA?
Working while receiving ESA is generally allowed provided that the following conditions are met:
- Working less than 16 hours per week.
- Earning no more than £183.50 per week.
You also have the freedom to participate in voluntary work for any number of hours.
ESA and claiming Universal Credit
You have the option to receive the new type of employment and support allowance either independently or alongside universal credit.
If you receive both simultaneously it’s possible that your ESA payment will be subtracted from your universal credit payment.
ESA and national insurance credits
You could potentially receive national insurance credits if you are not making national insurance contributions.
This applies when you are receiving benefits due to illness or unemployment and includes ESA claimants.
Class 1 NI credits contribute to your state pension and may also improve your eligibility for other benefits such as the new style jobseeker’s allowance.
If you receive ESA your national insurance record should automatically update with your national insurance credits.
ESA and pension income
New style ESA is not subject to means testing but it will be decreased if you receive private pension income exceeding £85 per week before tax.
Half of your private pension income over the £85 threshold will be deducted from your weekly ESA payments.
For example if your private pension provides you with £100 per week, £7.50 will be taken off your ESA payment each week.
In some cases if your private pension income goes over a certain value you may not receive any ESA payments at all.
Employment Support Allowance phone number and contact information
ESA claim helpline for new claims is: 0800 055 6688.
Reporting changes in circumstances for ESA: 0800 169 0310.
If you’re having difficulty with your ESA application or remain uncertain about your eligibility and would like some third party help you can get assistance from a Citizens Advice bureau or (one of the independent advice centres within the network) who can provide you with a personalised benefits check-up and support.
Alternatively you can contact Citizens Advice’s ‘help to claim service’ at 0800 144 8 444 for further assistance.
