Gip settlement and esa contrib

I have been receiving old style esa contribution in the support group - I have been in receipt of a group income policy gip via paye from my employer and my esa is taxed accordingly. The insurer and my employer want to make a settlement - my question is will the settlement be classed as pension income if I take it in lumps and therefore my esa will be wiped out or is there something I’m missing?

Hello David - I’m not getting legal advice yet as I’ve got an initial meeting with the employer to find out what the insurance offer is and then I thought I’d get advice on whether it was a good offer or not and what the employer cd possibly add to the settlement to get me off their books. Not sure how to negotiate this really. My other concern is if I take a lump sum as capital but it is broken down into payments does this then get classed as income by my esa contrib and would I lose my claim - it’s an old style one.

Hello David - it would possibly be paid in instalments to bring it below the higher tax rate.