PAYE77212 - PAYE operation: employment and support allowance: PB3 - IB to ESA reassessment (Action Guide)
Incapacity Benefit (IB) reassessment claims are normally submitted to HMRC electronically using the DWP Job Seeker’s Allowance Payment System (JSAPS).
Where the claim cannot be notified electronically, PB3 forms headed ‘IB Reassessment Claim’ will be issued by DWP to notify HMRC that the individual has moved from receiving IB to receiving Employment Support Allowances (ESA).
To process forms PB3, follow steps 1 - 54 below. This guide is presented as follows
Steps 1 - 3
Latest primary employment is IB - live or ceased
Steps 4 - 7
Latest primary is occupational pension or RACS and secondary IB is held - live or ceased
Steps 8 - 17
Latest primary is occupational pension or RACS or employment and no secondary IB employment is held
Steps 18 - 26
Latest primary is employment and secondary IB employment is held - live or ceased
Steps 27 - 35
Steps 36 - 40
Live employment record held for permitted work - primary or secondary
Steps 41 - 46
Latest primary employment is IB and secondary occupational pension or RACS held
Steps 47 - 53
Step 54
Initial action
1. Before proceeding check the Contact History screen to view notes and check previous actions
2. Review the Employment Summary screen for CY and determine the current employment position
3. Select the appropriate step number using the above table
Latest primary employment is IB - live or ceased
4. Review status of primary IB employment
- If IB employment is live, go to step 5
- If IB employment has ceased, go to step 6
5. Select the drill down button next to the IB employment record
- If no IB start date is shown, view P14 Summary screen to establish the year for which a P14 was first received for IB and enter an estimated start date as 05/04/20YY, substituting the tax year end of the first year for which a P14 was received for IB. For example, P14 held for 2005-06, enter start date as 05/04/2006
- Select cessation source as user
- Insert the date of leaving as the day before the ESA start date as shown on the PB3 and [Save]
6. Select the [Insert] button to create ESA employment
- Enter PAYE reference (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Select employment type as ‘Primary’
- Enter the DWP UBO office code in the Works No. field, using the correct format. The second digit should be omitted and a dash should be placed between the first two and last three digits in the format nn-nnn. For example, 92-710
Note: When inserting a works number do not use the ‘#’ symbol anywhere in the Works No field - Enter start date as shown on the PB3
- Enter start tax code as the code previously operated by DWP against the IB employment record and [Save]
7. Select the IABD Landing screen for CY and enter form type ‘Other form’
- Select the drill down button next to Employment Estimated Earnings
- Enter estimated IB to the date of leaving, based on the weekly rate of IB received prior to reassessment
- Enter estimated ESA, based on the weekly rate of IB received prior to reassessment for the remaining weeks of the tax year. Where you are unable to calculate the weekly IB, refer to the CY-1 IB P14 details, if held, and form P242. [Save] and [Submit]
- Issue a P2 to the customer and a manual P6U to DWP address shown on the PB3. Consider the basis of operation in accordance with PAYE11120
- Go to step 54
Latest primary is occupational pension or RACS and secondary IB is held - live or ceased
8. Before proceeding check the start date shown on the PB3. If the start date is in the future, put to one side, to be worked from the date ESA commences
Review whether P45(IB)(O) has been actioned
9. Select the Employment Summary screen and review whether secondary IB employment is held - live or ceased, then
- Select IABD Summary screen for CY
- Select the drill down button next to Incapacity benefit
- Note whether End date is shown
- If IB employment is live and End Date is not shown in IABD, follow steps 10 - 14
- If IB employment has ceased and End Date is shown as day before ESA start date, follow step 10 to create the ESA employment, then go to step 15
- If IB employment has ceased and End Date is not shown as day before ESA start date, follow step 10 to create the ESA employment, then go to step 20
Create the ESA employment
10. Select the [Insert] button on the Employment Summary screen
- Enter the PAYE reference (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Select employment type as ‘Secondary’
- Enter the DWP UBO office code in the Works No. field using the correct format. The second digit should be omitted and a dash should be placed between the first two and last three digits in the format nn-nnn. For example, 92-710
Note: When inserting a works number do not use the ‘#’ symbol anywhere in the Works No field - Enter start date as shown on the PB3
- Enter start tax code as the code previously operated by DWP against the IB employment record and [Save]
End date not shown
Cease the IB employment record
11. Select the drill down button next to the IB employment record
- If no IB start date is shown, view the P14 Summary screen to establish the year for which a P14 was first received for IB and enter an estimated start date as 05/04/20YY, substituting the tax year end of the first year for which a P14 was received for IB. For example, P14 held for 2005-06, enter start date as 05/04/2006
- Select Cessation Source as user
- Insert the date of leaving as the day before the ESA start date as shown on form PB3 and [Save]
Calculate and code ESA in CY IABD
12. View Tax Coding, Coding History for CY and note the annual deduction for IB shown in the latest CY primary tax code issued
- Calculate the weekly rate if IB using the CY coded figure divided by the number of weeks received
Note: If IB commenced CY, you will need to establish whether the benefit coded is annual or actual. Use 06/04/CY as the start date if known - Calculate the ESA benefit from the start date to the end of the CY tax year, using the IB weekly rate calculated above
- Select IABD Landing screen for CY and enter form type ‘Other form’
- Select Taxable Social Security Benefit
- Select the drill down button next to Employment and Support Allowance
- Do not enter a start date
- Enter the figure calculated for ESA in the ESA Benefit Amount field
- Set the Estimated ESA indicator and [Save]
Calculate and code IB in CY IABD
13. To calculate the apportioned CY IB coding deduction required, subtract the CY ESA deduction calculated as above, from the annual deduction for IB shown in the latest CY primary tax code issued
- Use the ‘Incapacity benefit Tool’ to calculate the entry required for IB in CY IABD, to produce the apportioned CY IB shown in the latest CY primary tax code issued
- Select the drill down button next to Incapacity Benefit
- Enter the end date as the day before ESA commenced
- Enter the apportioned figure for IB as calculated above and [Save] and [Submit]
- Issue a P2 to the customer and a manual P6U to DWP address shown on the PB3. A P6 should be issued to the primary source where the tax code has changed. Consider the basis of operation in accordance with PAYE11120
Update CY+1 IABD
14. To update the CY+1 IABD details
- Select IABD Landing screen for CY+1 and enter form type ‘Other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Incapacity Benefit
- If figure for IB is held, make a note of the figure and amend to 0.00
- If figure for IB is not held, calculate 52 weeks ESA
Note: If annual coding has taken place, include the CY+1 percentage increase amounts on form P242 - Select the drill down button next to Employment and Support Allowance
- Enter the figure required in the ESA Benefit Amount field
- St the estimated ESA Indicator and [Save]
- Go to step 54
End date is the day before ESA start date and ESA benefit details not yet entered
15. Where P45(IB)(O) has been received and processed, it is assumed that the IB source amount entered in CY IABD has been adjusted using the ‘Incapacity Benefit Tool’
Before proceeding, you should ensure the CY coding deduction for IB represents the actual IB received. If this is not the case follow steps 11 - 14
Calculate and code ESA in CY IABD
16. View Tax Coding, Coding History and note the deduction for IB shown in the latest CY primary tax code issued
- To calculate the CY ESA coding deduction required, subtract the IB coded deduction, from the annual deduction for IB, shown in the latest CY primary tax code issued prior to IB cessation
- Select IABD Landing screen for CY and enter ‘Other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Employment and Support Allowance
- Do not enter a start date
- Enter the figure calculated for ESA in the ESA Benefit Amount field
- Set the Estimated ESA indicator and [Save] and [Submit]
- Issue a P2 to the customer and a manual P6U to DWP address shown on the PB3. A P6 should be issued to the primary source where the tax code has changed. Consider the basis of operation in accordance with PAYE11120
Note: A P2 should not be issued to the customer for the secondary ESA employment record
Update CY+1 IABD
17. To update the CY+1 IABD details
- Select IABD Landing screen for CY+1 and enter form type ‘other form’
- Enter form type ‘other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Incapacity Benefit
- If figure for IB is held, make a note of the figure and amend to 0.00
- If figure for IB is not held, calculate 52 weeks ESA
Note: If annual coding has taken place, include the CY+1 percentage increase amounts on form P242 - Select the drill down button next to Employment and Support Allowance
- Enter the figure required in the ESA Benefit Amount field
- Set the Estimated ESA Indicator and [Save]
- Go to step 54
Latest primary is occupational pension or RACS or employment and no secondary IB employment is held
18. Select the drill down button next to the primary employment
- If the primary employment is occupational pension, go to step 19
- If the primary employment is not occupational pension, go to step 22
Primary employment is occupational pension
Create the ESA employment record
19. Select the [Insert] button on the Employment Summary screen
- Enter PAYE reference (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Select employment type as ‘Secondary’
- Enter the DWP UBO office code in the ‘Works No’ field, using the correct format. The second digit should be should be omitted, and a dash should be placed between the first two and the last three digits, in the format ‘nn-nnn’, for example 92-710
Note: When inserting a works number do not use the ‘#’ symbol anywhere in the Works No field - Enter start date as shown on the PB3 and [Save]
Calculate and code ESA in CY IABD
20. Select IABD Landing screen for CY and enter form type ‘Other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Employment and Support Allowance
- Do not enter a start date
- Calculate the ESA from the start date shown on the PB3 to 05/04/CY in accordance with PAYE77230 and treat as New claimant
- Set the Estimated ESA indicator and [Save] and [Submit]
- Issue a P2 to the customer for the primary pension record and a manual P6U with a BR tax code to DWP address shown on the PB3. A P6 should be issued to the primary record where the tax code has changed. Consider the basis of operation in accordance with PAYE11120
Note: A P2 should not be issued to the customer for the secondary ESA employment record
Update CY+1 IABD
21. To update the CY+1 IABD details
- Select IABD Landing screen for CY+1 and enter form type ‘Other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Employment and Support Allowance
- Calculate the ESA from 06/04/CY+1 to 05/04/CY+1 in accordance with PAYE77230
Note: If Annual Coding has taken place, include the CY+1 percentage increase amounts on form P242 - Enter the figure required in the ESA Benefit Amount field
- Set the Estimated ESA indicator and [Save]
- Go to step 54
Primary employment is not occupational pension
22. Review ESA start date shown on the PB3
- If ESA start date is after the current primary, go to step 23
- If ESA start date is before the current primary, go to step 26
ESA start date is after current primary employment
23. Select the drill down button next to the primary employment in the Employment Summary screen
- Select the P Ceased indicator and [Save]
Create the ESA employment record
24. Select the [Insert] button on the Employment Summary screen
- Enter PAYE reference (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Select employment type as ‘Primary’
- Enter the DWP UBO office code in the ‘Works No’ field, using the correct format. The second digit should be should be omitted, and a dash should be placed between the first 2 and the last 3 digits, in the format ‘nn-nnn’, for example 92-710
Note: When inserting a works number do not use the ‘#’ symbol anywhere in the Works No field - Enter start date as shown on the PB3 and [Save]
Calculate and code ESA in CY
25. Select IABD Landing screen for CY and enter form type ‘other form’
- Select the drill down button next to Employment Estimated Earnings
- Calculate the ESA from the start date shown on the PB3 to 05/04/CY in accordance with PAYE77230
- Set the Estimated ESA indicator and [Save] and [Submit]
- Issue a P2 to the customer and a manual P6U to DWP address shown on the PB3. Consider the basis of operation in accordance with PAYE11120
- Go to step 54
ESA start date is before current primary employment
Create the ESA employment record
26. Select the [Insert] button on the Employment Summary screen
- Enter PAYE reference (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Select employment type as ‘Primary’
- Enter the DWP UBO office code in the ‘Works No’ field, using the correct format. The second digit should be should be omitted, and a dash should be placed between the first and the last three digits, in the format ‘nn-nnn’, for example 92-710
Note: When inserting a works number do not use the ‘#’ symbol anywhere in the Works No field - Enter start date as shown on the PB3
- Set the P Ceased indicator and [Save]
- Go to step 54
Latest primary is employment and secondary IB employment is held - live or ceased
27. Select the Employment Summary screen and review whether secondary IB employment is held, live or ceased
- If IB employment is live, see step 28 onwards
- If IB employment has ceased, see step 29 onwards
Cease the IB employment record
28. Select the drill down button next to the IB employment record
- If no IB start date is shown, view ‘P14 Summary’ to establish the year for which a P14 was first received for IB and enter an estimated start date as 05/04/20YY, substituting the tax year end of the first year for which a P14 was received for IB. For example, P14 held for 2005-06, enter start date as 05/04/2006
- Select Cessation Source as user
- Insert the date of leaving as the day before the ESA start date as shown on the PB3 and [Save]
29.
Review ESA start date shown on PB3
- If ESA start date is after the current primary, go to step 30
- If ESA start date is before the current primary, go to step 35
ESA start date is after current primary employment
30. Select the drill down button next to the primary employment
- Select the P Ceased indicator and [Save]
Create the ESA employment record
31. Select the [Insert] button on the Employment Summary screen
- Enter PAYE reference (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Select employment type as ‘Primary’
- Enter the DWP UBO office code in the ‘Works No’ field, using the correct format. The first digit should be should be omitted and a dash should be placed between the first two and the last three digits, in the format ‘nn-nnn’, for example 92-710
Note: When inserting a works number do not use the ‘#’ symbol anywhere in the Works No field - Enter start date as shown on the PB3 and [Save]
Calculate and code ESA in CY
32. Select IABD Landing screen for CY and enter form type ‘Other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Incapacity Benefit
- If end date not shown or IB details have not been updated follow steps 13 and 14 to calculate the weekly rate (see ‘Example 1’)
33.
- Select the drill down button next to Employment Estimated Earnings
- Enter estimated pay details for ESA and the employment earnings and [Save] and [Submit]
- Issue a P2 to the customer and a manual P6U to DWP address shown on the PB3. Consider the basis of operation in accordance with PAYE11120
Update CY+1 IABD
34. Select IABD LANDING screen for CY+1 and enter form type ‘other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Incapacity Benefit
- If an amount of IB is shown update to 0.00 and [Save]
- Go to step 54
ESA start date is before current primary employment
Create the ESA employment record
35. Select the [Insert] button on the Employment Summary screen
- Enter PAYE reference (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Select employment type as ‘Primary’
- Enter the DWP UBO office code in the ‘Works No’ field, using the correct format. The second digit should be should be omitted , and a dash should be placed between the first two and the last three digits, in the format ‘nn-nnn’, for example 92-710
Note: When inserting a works number do not use the ‘#’ symbol anywhere in the Works No field - Enter start date as shown on the PB3
- Set the P Ceased indicator and [Save]
- Go to step 54
No live primary employment
36. Review the Employment Summary screen
- If a live IB Secondary employment is held, go to step 37
- If a ceased IB Secondary employment is held, go to step 38
- If no IB Secondary employment has been held, go to step 38 only and then issue P6 / P2, then go to step 54
Cease the IB employment record
37. Select the drill down button next to the IB employment record
- If no IB start date is shown, view ‘P14 Summary’ to establish the year for which a P14 was first received for IB and enter an estimated start date as 05/04/20YY, substituting the tax year end of the first year for which a P14 was received for IB. For example, P14 held for 2005-06; enter start date as 05/04/2006
- Select cessation source as user
- Insert the date of leaving as the day before the ESA start date as shown on the PB3 and [Save]
Create the ESA employment record
38. Select the [Insert] button on the Employment Summary screen
- Enter PAYE reference (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Select employment type as ‘Primary’
- Enter the DWP UBO office code in the ‘Works No’ field, using the correct format. The second digit should be should be omitted and a dash should be placed between the first two and the last three digits, in the format ‘nn-nnn’, for example 92-710
Note: When inserting a works number do not use the ‘#’ symbol anywhere in the Works No field - Enter start date as shown on the PB3
- Enter start tax code as the code previously operated by DWP against the IB employment record, if held, and [Save]
Calculate and code ESA in CY
39.
- Select IABD Landing screen for CY and enter form type ‘Other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Incapacity Benefit
- If End date is not shown enter the end date as the day before the ESA start date as shown on the PB3
- Enter IB as 0.00 and [Save]
- Select the drill down button next to Employment Estimated Earnings
- Enter estimated ESA including IB details to cessation. Where you are unable to calculate the previous IB, refer to the CY-1 IB P14 details if held, and form P242. [Save] and [Submit]
- Issue a P2 to the customer and a manual P6U to DWP address shown on the PB3. Consider the basis of operation in accordance with PAYE11120
Update CY+1 IABD
40. Select IABD Landing screen for CY+1 and enter form type ‘Other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Incapacity Benefit
- If an amount of IB is shown update to 0.00 and [Save]
- Go to step 54
Live employment record held for permitted work - primary or secondary
Where you are able to confirm that the customer is undertaking permitted work, for example by recorded receipt of form PW10 in CONTACT HISTORY, follow the steps below
41. Review the Employment Summary screen
- If the latest primary employment is the permitted work, and secondary IB employment is held, live or ceased, go to steps 42 - 46
- If the latest primary employment record is IB - live or ceased, follow steps 4 - 7, then review the tax codes in operation at each source
- If the latest primary employment record is occupational pension or RACS, follow steps 8 - 17, or 18 - 21, as appropriate, depending on whether IB employment is held, then review the tax codes in operation at each source
42. Select the drill down button next to the primary permitted work employment in the Employment Summary screen
- Select Employment Type and amend to Secondary using the drop down option and [Save]
Create the ESA employment record
43. Select the [Insert] button on the EMPLOYMENT SUMMARY screen
- Enter PAYE reference (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Select employment type as ‘Primary
- Enter the DWP UBO office code in the ‘Works No’ field, using the correct format. The second digit should be should be omitted and a dash should be placed between the first two and the last three digits, in the format ‘nn-nnn’, for example 92-710
Note: When inserting a works number do not use the ‘#’ symbol anywhere in the Works No field - Enter start date as shown on the PB3
- Enter start tax code as the code previously operated by DWP against the IB employment record and [Save]
Cease the IB employment record
44. Select the drill down button next to the IB employment record
- If no IB start date is shown, view ‘P14 Summary’ to establish the year for which a P14 was first received for IB and enter an estimated start date as 05/04/20YY, substituting the tax year end of the first year for which a P14 was received for IB. For example, P14 held for 2005-06, enter start date as 05/04/2006
- Select cessation source as user
- Insert the date of leaving as the day before the ESA start date as shown on the PB3 and [Save]
Calculate and code ESA in CY
45. View IABD Summary for CY and calculate the weekly rate of IB received
- Calculate the ESA benefit using the IB weekly rate calculated above
- Select IABD Landing screen for CY and enter form type ‘other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Incapacity Benefit
- If end date is not shown, enter the end date as the day before the ESA start date as shown on the PB3
- If IB has not been apportioned to the end date, use the ‘Incapacity Benefit Tool’ to calculate the entry required for IB to produce the apportioned CY IB coding deduction and [Save]
- Select the drill down button next to Employment Estimated Earnings
- Enter estimated ESA, based on the weekly rate of IB received prior to reassessment for the remaining weeks of the tax year and [Save] and [Submit]
- Issue a P2 to the customer and a manual P6U to DWP address shown on the PB3. Review the tax code in operation against the permitted work employment source. A revised tax code will be required. Consider the basis of operation in accordance with PAYE11120
Update CY+1 IABD
46. Select IABD Landing screen for CY+1 and enter form type ‘other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Incapacity Benefit
- If an amount of IB is shown update to 0.00 and [Save]
- Go to step 54
Latest primary employment is IB and secondary occupational pension or RACS held
47. Before proceeding check the start date shown on the PB3. If the start date is in the future, put to one side, to be worked from the date the ESA commences
48. Review status of primary IB employment. Select the Employment Summary screen and review whether the primary IB employment
- If IB employment is live, go to step 49
- If IB employment has ceased, go to step 50
Cease the IB employment record
49. Select the drill down button next to the IB employment record
- If no IB start date is shown, view ‘P14 Summary’ to establish the year for which a P14 was first received for IB and enter an estimated start date as 05/04/20YY, substituting the tax year end of the first year for which a P14 was received for IB. For example, P14 held for 2005-06; enter start date as 05/04/2006
- Select cessation source as user
- Insert the date of leaving as the day before the ESA start date as shown on the PB3 and [Save]
50. Select the drill down button next to the pension employment record in the Employment Summary screen
- Select Employment Type and amend to ‘Primary’ using the drop down option and [Save]
Create the ESA employment record
51. Select the [Insert] button on the Employment Summary screen
- Enter PAYE reference (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Select employment type as ‘Secondary’
- Enter the DWP UBO office code in the ‘Works No’ field, using the correct format. The second digit should be should be omitted, and a dash should be placed between the first two and the last three digits, in the format ‘nn-nnn’, for example 92-710
Note: When inserting a works number do not use the ‘#’ symbol anywhere in the Works No field - Enter start date as shown on the PB3
- Enter start tax code as the code previously operated by DWP against the IB Employment record and [Save]
Calculate and code ESA in CY
52. View IABD Summary for CY and calculate the weekly rate of IB
- Calculate the ESA benefit using the IB weekly rate calculated above
- Select IABD Landing screen for CY and enter form type ‘Other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Incapacity Benefit
- If end date is not shown, enter the end date as the day before the ESA start date as shown on the PB3
- If IB has not been apportioned to the end date, use the ‘Incapacity Benefit Tool’ to calculate the entry required for IB, to produce the apportioned CY IB coding deduction and [Save]
- Select the drill down button next to Employment and Support Allowance
- Do not enter a start date
- Calculate estimated ESA, based on the weekly rate of IB received prior to reassessment for the remaining weeks of the tax year and enter the figure calculated in the ESA Benefit Amount field
- Set the Estimated ESA indicator and [Save] and [Submit]
- Issue a P2 to the customer for the primary pension record and a manual P6U with a BR tax code to DWP address shown on the PB3. A P6 should be issued to the primary pension record. Consider the basis of operation in accordance with PAYE11120
Note: A P2 should not be issued to the customer for the secondary ESA employment record
53. Select IABD Landing screen for CY+1 and enter form type ‘Other form’
- Select Taxable Social Security Benefits
- Select the drill down button next to Incapacity Benefit
- If an amount of IB is shown update to 0.00 and [Save]
- Go to step 54
Update Contact History
54. When Individuals record has been updated
- Update Contact History with actions taken
- Scrap the PB3