Income protection insurance - effect on means-tested benefits

Hello everyone

Had a Twitter enquiry on Income Protection Insurance and the effect on IS, IBJSA, IRESA, PC, HB & CTB.

Had a look in Disability Rights Handbook and CPAG and no mention anywhere.

Does it just count in full as it is designed to be a replacement income?

Here is the info on Money Advice Service website.

http://www.moneyadviceservice.org.uk/yourmoney/insurance/income_protection_insurance.aspx

Can you help benefit experts?

Lee H

(any good replies and sources will be credited!)

Here are my thoughts…

For people under pension credit age, all income is taken into account for IS, income-based JSA and income-related ESA unless it is specifically disregarded.  As it is not specifically ignored, even partially like mortgage interest protection or loan protection, income protection insurance would I think be counted in full for means-tested benefits for people under pension credit age.

However for people over pension credit age income is taken into account for PC, only if it is specified as income under s15 State Pension Credit Act or Reg. 15 State Pension Credit Regulations.  If it is not specified, it is ignored and does not affect the claimant’s benefit (see p. 940-941, CPAG handbook).  I am less certain as to whether it counts as income for PC having had a quick glance at the regs.  Possibly someone else has the answer to this…

Thanks Domino, I think you are spot on. Is there a specific reg for IS/IBJSA/IRESA which says ‘all income disregarded apart from…?’

Lee H

I know, for HB/CTB puposes, the income is disregarded up to the amount the insurance is meant to protect. Any other amount over and above the anount is then used as income.

I would assume, and this is just my logical brain thinking, this would be the same across board?