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For those on ESA, yet more unfairness

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For those on ESA, yet more unfairness

Post by Adversity on Sat Mar 28, 2015 2:11 pm

Has anyone considered how the new tax situation for 2015-2016 will penalise us further?

The new tax law effectively adds £5000 to your personal tax allowance if your TOTAL TAXABLE income and taxable savings income in total is less than your current personal allowance plus £5000, (ie. so for me- my personal tax allowance is £10,600, so technically I could earn a total taxable income of £15,599 tax free. (This is separate to the 2016-2017 new tax law about savings tax).

My taxable ill health pension is circa £11,000 a year, and my savings income is minimal, (I can ignore my non taxable injury pension as they only look at taxable income), so yes, seemingly I would qualify. But no, remember I get £5,700 taxable ESA benefit 'taken off' my non taxable injury pension, topping me over the £15,600.

So that means incapacity benefit will cost me over £2,000 a year in lost tax, (by losing £1000 as a result of paying tax on the incapacity benefit anyway, which is taken off my non taxable injury pension, and now potentially another £1000, as a result of not being able to gain from the new extra tax allowance.

I am aware some people are not currently having the ESA taken off, I am aware of the battles to correct this, but regardless, they will soon change the law to make ESA deductible for all of us. I have made the SW rep aware of this, as I know he does a lot of work in this area.

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Re: For those on ESA, yet more unfairness

Post by officerdribble on Fri May 15, 2015 8:56 pm

You've totally lost me with this one other than...yeah...a 'tax free' injury pension gets taxed by way of deducting the ESA gross instead of net of tax. The pension administrators (to my mind) getting the relief instead of the pensioner. Got to be wrong hasn't it? Taking money from injured officers because they think they can. Whether that gets sorted in the pending changes, I doubt. I'd hope NARPO would also see it this way but something tells me that's a NOT. Or not bothered.

officerdribble

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