ESA with Lump Sum Pension

I am on ESA as not fit to work anymore. Been on ESA for nearly 2 years. I had a pension which I requested early. Received a letter saying my tax free lump sum will be £16,295. My monthly pension will be £202 per month. I have no savings. The tax free lump sum will buy things I need but I have been told that I may lose my ESA as "they" will look at the amount and decide how much per month I can live on and would then reapply for ESA once the lump sum has gone. At present I get my rent and council tax paid and get £212 a fortnight from ESA. This seems so unfair to lose my pension lump sum - can you advise please. Thank you.