I'm sorry to hear about what has obviously been a tough time. Most of us would struggle to adjust to such a sharp drop in income, and when you have to cope with the challenges of a health problem and a benefits appeal too, things must feel pretty overwhelming. I'm glad to hear that you are going to contact the CAB, who will almost certainly carry out a benefit check for you.
In brief, when you are living together with a partner as though you were married, you are treated as a couple for benefit purposes.
For means tested benefits like income related ESA, you are no longer entitled if the claimant works for 16 hours or more a week or their partner works for 24 hours or more a week.
Whilst you are getting ESA, you can do certain types of work - "permitted work" which means that you can work for under 16 hours a week, earning up to £120 a week, and have all the earnings from this work disregarded when looking at how much benefit you qualify for. (This is to encourage people who are sick or disabled to prepare for returning to work.)
However, once you lose entitlement to ESA, as you have discovered, your earnings, along with your partner's, are taken into account in full when working out entitlement to benefit, subject to a £20 disregard because you have been found to have limited capability for work.
Means tested benefits generally work by working through a 3 step process:
a) how much do you need to get by on a week?
b) how much assessable income have you got coming in (after disregards and ignoring benefits like DLA/PIP which aren't there for rent or day to day living expenses, but for the extra costs of disability) and
c) what's the difference between steps a) and b)?
If there is a shortfall, benefit can make up the difference and if you have excess income, you don't qualify.
We've seen that you don't qualify for income related ESA simply on the basis of your partner's working hours. When it comes to housing benefit, the three steps work like this:
a) Because you are a couple, you need £114.85 a week to buy food etc. The first £114.85 isn't available, therefore, to pay your rent. This £114.85 is called your "applicable amount". Previously, you would have had extra amounts included, called "premiums" included in your applicable amount because you were getting DLA, but since you aren't getting DLA or PIP just now, these aren't included.
b) Your income and your partner's is added together, and then £20 is "disregarded". So say, for example, that your joint income was £220 a week - for benefit purposes, you are treated as having £200 a week.
c) Your assessable income (£200) exceeds your applicable amount (£114.85) by £85.20. This is called your "excess income". For housing benefit purposes, you are expected to contribute 65% of your excess income ( = £55.38) towards your rent (and usually, 20%: £17.04 towards your council tax).
So say your rent was £150 a week. You would be expected to pay £55.38 towards your rent, and housing benefit could help with all or most of the rest. I say all or most because some people have a cap of some kind applied to the amount of the rent they can get help with. That is often the case where they are considered to be under-occupying (the bedroom tax), or where their rent is considered to be too high, compared with other rents in the area.
If all of your rent is not being covered by housing benefit, you can apply for a Discretionary Housing Payment from the council. However, if it looks to the council as though there is enough money coming into the home from both members of the couple to afford the rent in full, they may not agree. The CAB will be able to give you more advice about this.
The other thing the CAB will advise you about is that, depending on what part of the country you live in, you may not be able to reclaim housing benefit, and may have to claim Universal Credit instead.
If this is the case, make sure that they explain to you what would happen to you if you were later to claim benefit as a single person. I'm not suggesting that that's about to happen - but as we know, it's good to get sound advance advice on what can happen if we end up alone.
The CAB will also be able to advise you, I expect, about your PIP appeal. If at all possible, try to get representation from them or a disability rights group. You could also go to the website for Disability Rights UK and look at their factsheet on PIP. MIND UK have a fantastic website too, which also has a forum for people affected by the issues you discussed.
I hope you will try and take extra care of yourself at this time. Please consider going to see your GP if you are feeling more stressed or depressed than usual. Also, please put the (free) phone number for the Samaritans into your phone:116 123. You don't have to be suicidal to call - you may just feel as though you are absolutely on the edge. I think that many people who have never had to get by on benefits with a mental health problem have no idea how overwhelming it can feel. Don't deal with this by yourself!