Help Required For WTC/ESA/Self Employment

[harvey111]

Hello

 

I need some help regarding the above for my daughter-in-law.

 

Facts first;

Seperated from my son

Claims ESA Support Group CB

DLA Low Rate Care & Mobility

Working and child tax credits

Two children, 1 of which receives higher rate care and low mobility

Registered as self employed - working 18 hours permitted work for £20 per week, cannot earn more than that due to ESA rules.

 

Please do not judge, I am stating the facts as they exist and please note, DIL has been allowed to claim these benefits for a number of years but has recently found out that WTC rules due to be made this month, that WTC will need to see she is working for the NMW, which of course she cannot do, just earning £20 per week for self employment and also would need to provide details of her earnings - no records have been kept due to mental illness, just calculated at £20 per week over the year.

 

Fills in self-asssessment every year, declaring her income and taxable ESA, totalling over £7K per year.

 

So my questions are what can she do regarding these new rules, does she no longer claim ESA, should she stop the ESA claim now and lose approx £460 per 4 weeks? Or wait for HMRC to ask her to prove her income and hours worked, which she does not have? And then lose a large amount from WTC & CTC?

 

A couple of years ago she had a compliance check and was totally honest about her living alone with just her 2 children, her work and her benefits allowance. At no point was she asked for records about her employment, she sent proof of bills, bank statements etc.

 

She is now more mentally unstable and I am trying very hard to help her, but she has stated that if her WTC was to be cut, she would harm herself. She has an appointment with the GP on Wednesday. She has previously had care from a CPN. I don't know where my son is and neither does she.

 

She is vunerable and I need some help please as I am not sure what best to advise her.

 

Please don't judge, the system has allowed her to claim these benefits and I can personally vouch for her self employment, she is up all hours of the night doing her self employment, incuding the early hours of the morning as she just cannot sleep. She also cares for my grandson during the night as he has frequent 'accidents' whilst sleeping.

 

I have tried to research these new rules, it stated somewhere that caring for another person can count as work, so she does that, but how would she say that as she is not getting paid for it.

 

If she loses her WTC, she will lose her house and to be honest, I am scared what she will do.

[harvey111]

Forgot to add, I have looked at Universal Credit, and that would be a better option for her as she would get some help with the mortgage but as far as I know it isn't in place in our area and won't be until 2017.

[blondebubbles]

What is that she does for these 18 hours per week that she only earns £20 per week?

 

Tax credits are cracking down on those who are self employed but making little to no income year in year out. Their rules haven't changed in any way. They have just clarified when they will start carrying out their compliance checks.

 

Those earning less than NMW for their qualifying hours (in her case less the NMW x 16 hours) will be asked to prove that the business is carried out on a commercial basis with the view to making a profit. The work must also be organised and regular.

 

My understanding of permitted work was that it must be less than 16 hours per week.

 

http://www.actionforme.org.uk/Resources/Action%20for%20ME/Documents/get-informed/Permitted-work-factsheet.pdf

 

She is currently claiming a benefit for being too ill or disabled to work whilst also claiming a benefit for working. I don't see how she can claim both.

 

Caring is not classed as work unless you are employed to do so or that is your self employed business.

[harvey111]

I understand what you are saying BlondeBubbles but the fact remains that she has been able to claim these benefits for quite a few years now.

 

As far as I am aware permitted work can be for more than 16 hours and not earn more than £20, or work less than 16 hours and not earn more than approx £104 per week, so in this case she has been following the rules at it were.

 

Her self employed work is just ironing, she has filled in her self assessments every year and no questions have been asked. A compliance check went okay and again, no questions asked even though she was on the phone to a lady for over 1 hours explaining everything. This was 2-3 years ago and she has not had a peep out of of HMRC since.

 

Sorry, forgot at add, she charges little amounts of money for black sacks of ironing. She finds it theraputuic and feels like she is contributing somewhat, it is good for her mental health but does take a long time doing it.

 

Please be assured that she is doing nothing wrong, I have made sure of that but I need to know what will happen to her when these new rules start.

[blondebubbles]

Re: permitted work. That is not what is stated in numerous links I have found online. She should contact ESA to be sure. I would also suggest she gets this in writing if she doesn't already have something to confirm this.

 

There are no new rules for tax credits. The rules are the same as they have always been. As I said, tax credits have only clarified how they will choose their compliance checks in future.

 

Child tax credits wouldn't no be affected as you do not need to work to receive these/

[harvey111]

Permitted work for those on ESA, incapacity benefit or severe disablement allowance

 

You have a choice of permitted work options depending on your circumstances:

 

• Permitted Work Lower Limit - under this option you can earn up to £20 a week for an unlimited period.
  

Taken from disabiltyrightsorg. Cannot post a link, I know that the benefits agency are aware as she had to fill in a form stating so and once when there was a mix up of banks from WTC, she called the benefits agency and asked for a loan and they stated they were aware she was in recipet of WTC>

[harvey111]

Re: permitted work. That is not what is stated in numerous links I have found online. She should contact ESA to be sure. I would also suggest she gets this in writing if she doesn't already have something to confirm this.

There are no new rules for tax credits. The rules are the same as they have always been. As I said, tax credits have only clarified how they will choose their compliance checks in future.

 

Child tax credits wouldn't no be affected as you do not need to work to receive these/

 

So it's not set in stone that she will have a compliance check when renewing her claim. I think she needs to start taking records of her self employment and possibly look to not claim either ESA or WTC, but that is something for another day. I just need to reassure her that she isn't going to lose anything in the short-term.

[blondebubbles]

Permitted work for those on ESA, incapacity benefit or severe disablement allowance

 

You have a choice of permitted work options depending on your circumstances:

 

• Permitted Work Lower Limit - under this option you can earn up to £20 a week for an unlimited period.
  

Taken from disabiltyrightsorg. Cannot post a link, I know that the benefits agency are aware as she had to fill in a form stating so and once when there was a mix up of banks from WTC, she called the benefits agency and asked for a loan and they stated they were aware she was in recipet of WTC>

 

The link I posted stated less than 16 hours.

 

Anyway, regardless, tax credits can still investigate her self employment. If she is restricting herself to earning £1.11 per hour then they may not allow her working tax credits to continue. Current NMw is £6.50 per hour.

 

That said, each claim is looked at in its own merits so she would need to wait and see if she is asked about it and provide the require evidence to prove her business is viable.

 

There is no way of knowing when/if they will do a compliance check. They could do one next week or not at all.

[harvey111]

Thank you Blonde Bubbles, you have reassured me in some way. Like I said, she did have a compliance check when all of this was explained and no further action was required so we shall just wait and see. Her business is viable, she is making a profit, albeit a small one, but I think records now need to be kept. I am sure, if checked, medical evidence can be provided if need be - as in a job working with other people would be difficult and would mean her leaving the house which at the moment she cannot do. Her medical assessment from Atos agreed with this.