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Income-related ESA replaces Income Support on grounds of ill-health for new claimants from October 2008. It is a means-tested benefit sitting alongside Income Support and income-related JSA.
Contributory ESA replaces Incapacity Benefit for new claimants from October 2008. It is paid if the client meets NI contribution conditions. It is treated as income for means-testing purposes.
Existing claimants of Income Support on grounds of ill-health and Incapacity Benefit are to be "migrated" to ESA by 2013.
The rates of both the contributory and means-tested forms are identical, so it is often difficult to determine if the ESA is income-related or contributory. Useful pointers are:
Initially ESA claimants are in a short "assessment phase" but after a medical assessment they will receive either the "work-related activity component" or the "support component". These "components" are analogous to premiums and they can be awarded within means-tested benefits for those under the Qualifying Age for State Pension Credit.
Receipt of the "support component" entitles the applicant to an enhanced disability premium in the means-test calculation (provided that s/he and any partner are under 60).