ESA raises the bar for people intending to enter education

People on benefits who want to go to college may find it more difficult with the Employment and Support Allowance, writes Gary Vaux 

There seems to be a problem with the payment of tuition fees for students in non-advanced education. In particular, many students with learning disabilities who attend colleges in preference to traditional day centres, have been affected by what seems to be a tightening up of the policy this year. And the introduction of the Employment and Support Allowance in October 2008 might make the matter worse.

The official line taken by the Learning and Skills Council is that students aged 19 and over are required to pay 50% of the cost of a course. But this does not apply if the student is on means-tested benefits such as income support.

But receiving a means-tested benefit isn’t the only indicator of low income. For example, younger disabled adults can claim incapacity benefit without satisfying the normal national insurance contribution test, but they are still likely to be on a low income that is only a few pounds at most above income support levels. They will also lose what are known as passported benefits such as free prescriptions, full housing benefit, access to one-off payments from the Social Fund for furniture, bedding and so on.

In addition, because incapacity benefit and income support are structured differently, and increase at different rates for different reasons, some claimants are due a small income support top-up to their incapacity benefit but fail to claim it. But they would still be assessed as liable to pay college fees because they were not in receipt of income support.

The final problem is that the level of fees can wipe out any remaining gain from being on incapacity benefit. If a student is £4 a week better off on paper by being on incapacity benefit, but has to pay £500 a year in fees, they are actually £6 a week worse off than a person on income support with full remission.

As of last week, it became more difficult still with the introduction of the Employment and Support Allowance to replace incapacity benefit and income support for people who are sick (new claims only).

ESA is, like incapacity benefit, based on NI contributions, but it can also be awarded to younger claimants without an NI record. There is also a means-tested version (ESA – income-based). So the structure is similar to the existing system.

The major difference is with the payments. Unlike incapacity benefit, which was normally higher than income support, the two versions of ESA are paid at the same basic rate. During the first 13 weeks of the claim, this is significantly lower than the present system for younger claimants. After this 13-week phase, there is then a strong likelihood that a person getting income-based ESA could have a higher income than someone on contributory ESA. Yet only the former would get the fees concession, not the latter.

Of course, it’s possible that a person on contributory ESA may have a lower income but have substantial savings, or a partner who has a large income from wages, which would distort the picture still further.

The anomalies that exist in the concessionary fees policy will be exaggerated still further when ESA is introduced. The concessions policy has to be more carefully drafted to ensure that the imposition of tuition fees isn’t pushing more people into poverty and denying people with learning disabilities a chance of education.

Incidentally, have your own local authority policies taken account of ESA?

Gary Vaux is head of money advice, Hertfordshire Council. He is unable to answer queries by post or telephone.

If you have a question e-mail Natalie Valios

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