ESA & Incapacity Benefit

Employment and Support Allowance (ESA) was introduced on 27 October 2008 as the replacement for Incapacity Benefit. There are 2 elements: contribution-based ESA and income-based ESA.

Contribution-based ESA is taxable and is reported in box 13 on page TR 3 of the main return (SA100).

This section includes the following tabs. Click on a heading to find out more about the boxes on each tab.

Option Description
Name of office The name of the office that is paying the benefit.
Address of office The address of the office that is paying the benefit.
Postcode of office The postcode of the office that is paying the benefit.
Payment start date Enter when the benefit payments started if known.
Payment end date Enter when the benefit payments ended if known.
Enter periodic payments on Payments tabs Select this option if you're going to enter details on the payments tabs.
Enter totals Select this option to enter total Gross and total Tax.

The two Payments pages enable you to enter details about a benefit that has changed during a tax year. You may want to do this to accommodate a change in payment frequency or the amount of each payment.

You can enter individual payments and adjust the totals on the Totals page, or you can disregard the details of individual payments and just enter the total amounts.

Option Description
Payment frequency Choose a frequency from the options in the drop-down list.
Number of payments

This is the number of payments that the client is entitled to for the currently selected tax year based on the Payment frequency you've selected.

For example, choosing Monthly as the Payment frequency will set this box to 12.

You can change this default figure.
Individual / Gross The gross amount of each payment that the client received in the Individual box.
Individual / Tax This is defaulted to the lower tax rate proportion of the corresponding payment type (individual or total). You can change this default amount.
Individual / Net This is the Gross amount minus the Tax amount. You cannot change this default amount.
Total / Gross This is the total gross amount for the payment in the currently selected tax year. It is the Number of payments multiplied by the Individual gross amounts. You can change this default amount.
Total / Tax This is the default overall amount of tax that is due on the payment. You can change this default amount.
Calculate Enter an amount in the Individual/Gross box and select this button to automatically calculate the details for the Pension payment. You must also click this button if the amount in the Individual/Gross box is changed or if you change the values in the Payment frequency drop-down list or the Number of payments box.

These details are used in the Income section of the Tax Return.

Option Description
Gross total This is the overall gross total that the client received from the benefit during the currently selected tax year.
Tax total This is the total amount of tax deducted from the benefit.
Net total This is the Gross total minus the Tax total.

How do I get here?

Pensions and benefits > State pensions and benefits > ESA & Incapacity Benefit

What's this page about?

Use this form to enter details of payments that the client was entitled to receive from ESA & Incapacity Benefit.

Do not enter details if this benefit is not taxable. It is not taxable when:

  • it is benefit paid in the first 28 days of incapacity
  • it is benefit payable for a period of incapacity which began before 13/05/1995, and for which invalidity benefit used to be payable.

ESA & Incapacity Benefit is taxed as social security income (formerly taxed under Schedule E).

The tax year that you are entering details for is shown at the top of the data entry page. If you want to change the tax year, you should select a new date from the drop-down list at the top of the navigator.

  • Auto calc - If you tick this option, the calculations will be automatically completed for you where possible. If you untick this box you will see a new tab appear called Summary.

    Note: Not all data-entry forms have an Auto calc option.

  • Estimated - Tick this box to indicate that the figures you've used are estimated. This will then show on the item in the navigator, and at the higher level folder in the navigator by showing a small e.
  • Complete - Tick this to indicate that the form is complete. A green tick will appear on the item in the navigator and at the higher level folder in the navigator.

If you want to close the page without saving any of your changes, you can click Cancel. If you were adding new details, then nothing will be saved. If you were editing an existing item then the page will close, reverting to your previously saved details.