Austerity, the welfare state and protection insurance


    1. Contribution-based ESA: lasts 1 year if you’re in the work-related activity group. You may be able to re-apply at least 12 weeks after your contribution-based ESA ends if you qualify again, which depends on National Insurance contributions you paid in different tax years and whether your health deteriorates and you’re placed in the support group. There’s no time limit on how long you can claim contribution-based ESA if you’re in the support group.

    2. Income-related ESA: something for which a person may qualify if you no longer qualify for contribution-based ESA. The amount depends on circumstances and there’s no time limit on income-related ESA.

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    The amount of financial support is far from substantial. A claimant will normally receive the assessment rate for 13 weeks after a claim:

    • up to £57.35 a week if aged under 25; or

    • up to £72.40 a week if aged 25 or over.

    After that, if entitled to ESA, claimants are placed in 1 of 2 groups and will receive:

    • up to £101.15 a week if in the work-related activity group; or

    • up to £108.15 a week if in the support group.

    This is of course a very basic safety net and crucially does not allow a person who is used to all but the most basic of lifestyles to live in the way they may wish.

    For those who have seen the Seven Families campaign, a charity-led initiative that launched in November to highlight these kinds of issues, you may remember the first recipient of the income protection-style support was a lady who had to sell her house because illness meant she could no longer afford it live in it. She subsequently had to move onto a narrow boat.

    Tom Conner at Drewberry Insurance, who is a major advocate of income protection, argues the product is a way to privately guard against the substantial drop in income most would experience in the event they are unable to work, even despite the welfare safety net.

    He says: “Income Protection replaces your salary if you are too ill to work due to illness or disability so it is the most important policy to recommend when advising a client how best to protect their finances. It will continue to pay out either until the end of the term, which can run until retirement age, or until the client is well enough to return to work.”

    Going ‘private’

    The NHS is an area that even the traditional ‘right’ of the political spectrum tend to defend. In fact, around 11 per cent of the population choose private medical insurance and approximately 1m operations are performed privately every year.