Changes to ESA/WRAC – Impact on Group Income Protection

Since 1995 any UK individual who has been unable to work due to illness or injury has been able to claim an incapacity benefit from the UK Government providing they meet the necessary eligibility criteria.

Following the March 2015 Budget, the Government announced plans to change the UK’s welfare system with a view to halving the disability employment gap. The new system is designed to remove financial incentives for claimants and to encourage them to actively seek employment.  Part of this involves the removal of the Work Related Actively Component by 1 April 2017.

Any new claimants not considered to be in the support group post 1 September 2016 will only receive the ESA Basic Allowance of £73.10 per week and therefore will see a reduction in their weekly allowance of £29.05, based upon current levels. Those currently claiming WRAC will continue to receive their additional weekly payment of £29.05 from week 42 of incapacity up to a maximum of 39 weeks thereafter.

There are no plans to amend or remove the current Support Component.  Support group claimants are eligible to receive the additional benefit after week 42 of incapacity up to state pension age.

To find out more, please download our briefing note below.