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DWP EESA CONTRIBUTION AND INCOME BASED

Hi,

I was wondering if anyone will be able to clarify the differences between the contribution based and income based ESA.

I believe the income based is not taxable, whereas the contribution based is taxable. How will I know whether or not my client is receiving the income or contribution based ESA and whether or not to include it on their tax return?

Any information is appreciated, thank you!

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By puzzel
16th Jul 2013 12:08

Would have thought they are both taxable

however there is a difference between the two.

Contribution based, is paid for 365 days. After this period the benefit is assessed on an income basis. i.e. do you own a house and have capital available, does you partner work 24 hours or more

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By ftodd
17th Jul 2013 10:45

Thanks

Ok so am I right in thinking that everyone who starts receiving ESA will initially receive the contribution based ESA and therefore it is a taxable benefit for the first year, then they will receive the income based ESA if they qualify..

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