Bury Involvement Group

Incapacity Benefit ceased for most new claimants from 27 October 2008

From 27 October 2008, incapacity benefit was replaced by Employment and Support Allowance (ESA) for new claimants. People already claiming Incapacity Benefit continue to receive it but no new claim for incapacity benefit can be made on or after this date (but see next paragraph). A claim for Incapacity Benefit made after 27 October 2008 is usually treated as a claim for ESA. However, if a claimant continues to be entitled to Income Support on certain grounds after 27 October 2008, s/he can claim Incapacity Benefit after this date. These grounds for claiming Income Support are that the claimant is:-

• registered blind, or who was on the local authority register of blind people and is now within 28 weeks of being taken off the register; or
• a person who is incapable of work in certain circumstances; or
• a full-time student whose applicable amount includes a disability premium or severe disability premium, or who has been incapable of work for a continuous period of not less than 196 days. Two or more periods separated by a break of 56 days or less are treated as a continuous period; or
• a deaf student in certain circumstances; or
• a qualifying young person in relevant education whose applicable amount includes the disability premium or severe disability premium. Qualifying young person means the same as it does for child benefit; or
• a qualifying young person in relevant education, and s/he has been incapable of work for a continuous period of not less than 196 days. Two or more periods separated by a break of 56 days or less are treated as a continuous period. Qualifying young person means the same as it does for child benefit.

Certain claimants who were previously entitled to Incapacity Benefit may be able to make a further claim after 27 October 2008 if it can be linked to a previous period of entitlement. However, a claimant cannot do this on or after the 31 January 2011 (see next paragraph). The linking rules mean that two periods of incapacity for work which have a break between them of eight weeks or less are treated as one period of incapacity for work. Where the claimant is a work or training beneficiary, this break can be up to 104 weeks.

Before 31 January 2011, a claimant who reclaims Incapacity Benefit under the linking rules mentioned in the previous paragraph is treated as claiming Incapacity Benefit rather than employment and support allowance (ESA), even though most new claims for Incapacity Benefit are treated as claims for ESA. However, a process for transferring existing claimants getting Incapacity Benefit to ESA will take place between 1 October 2010 and March 2014. Because of this, a claimant who reclaims Incapacity Benefit on or after 31 January 2011 will be treated as if s/he is claiming ESA unless s/he is claiming it because s/he is getting Income Support on certain grounds. S/he will not therefore be able to benefit from the linking rules and reclaim Incapacity Benefit.

A claimant will need to consider carefully the effect of coming off Incapacity Benefit if there is a risk of losing the benefit of the linking rules and having to claim ESA. This is because a claimant on Incapacity Benefit who is transferred to ESA will receive an additional amount, known as a transitional addition, to compensate for the difference between the amount of her/his benefit and ESA if ESA would otherwise be lower. However, if a claimant comes off Incapacity Benefit and is not transferred from Incapacity Benefit to ESA, but then needs to claim ESA, her/his ESA will not include this transitional addition.

Transitional awards of incapacity benefit 

A client who was receiving sickness benefit or invalidity benefit before 13 April 1995 and who continues to be incapable of work will receive a transitional award of Incapacity Benefit. S/he will be protected from some of the changes to the rules which were introduced with Incapacity Benefit.

A client who was receiving sickness benefit immediately before 13 April 1995 transferred to a transitional award of short-term Incapacity Benefit from that date. If her/his period of incapacity for work continued and s/he had not reached pensionable age, s/he became entitled to long-term Incapacity Benefit after 364 days. If the client was entitled to sickness benefit because of an industrial injury, s/he only became entitled to long-term Incapacity Benefit under the transitional rules if her/his incapacity continued to be due to an industrial accident or a prescribed industrial disease. Breaks in incapacity for work covered by the linking rules are ignored.

A client who was receiving invalidity benefit on 12 April 1995 will receive a transitional award of long-term Incapacity Benefit from 13 April 1995, provided s/he was still incapable of work on 13 April 1995.

A client who stopped receiving invalidity benefit on or after 15 February 1995 and before 13 April 1995, and who became incapable of work again within 57 days of the date invalidity benefit was stopped, is treated as receiving invalidity benefit on 12 April 1995 and will receive a transitional award of long-term Incapacity Benefit.

A transitional award of long-term incapacity benefit paid because of industrial injury or disease, even though the client did not satisfy the national insurance contribution conditions, will stop when the client is no longer incapable of work for that reason. Breaks covered by the linking rules are ignored.

Identifying clients with a transitional award 

A client with a cheque which states s/he is receiving invalidity benefit for a period after 12 April 1995 will be receiving a transitional award of Incapacity Benefit. However, it will not always be possible to identify from the client’s cheque whether s/he is receiving a transitional award. It is therefore important to check if the client was receiving sickness benefit or invalidity benefit on or before 12 April 1995, and has continued to be incapable of work (apart from breaks covered by the linking rules).