Employment and Support Allowance (income related) and earnings
By Judy Scott
One in four people in Hastings are relying on benefits. Many are in receipt of Employment and Support Allowance (ESA) because of health problems.
If you get Employment and Support Allowance (income related,) you are allowed to earn up to £140 a week providing you keep your work to less than 16 hours a week and fill in the DWP form before you start. Neither ESA or Housing Benefit will be reduced.
Should you get an offer of part-time employment or could earn some money from dog walking, trading at Boot Fairs, child minding or any other activity this is what you need to do first.
Before you start earning, Download a Permitted Work form from DWP (PW1) – https://tinyurl.com/DWP-PW1
Before you fill in the PW1 form, first check the recorded reasons why you are receiving Employment and Support Allowance to remind yourself what to highlight in the form. You should explain about support you might get for your health or disability needs. Where appropriate you can explain how you can only work on good days and any other strategies for coping. Be careful about what sort of work you decide to do. DWP have said that if a person starts Permitted Work in the same job that they had before falling ill, they will be likely to have their entitlement reviewed.
If you also receive Disabilty Living Allowance (DLA) or Personal Independence Payment (PIP) these benefits are not affected by earnings or savings. But before you fill in the PW1 form, check the reasons why you receive a benefit for mobility and/or care needs. This is in case the work you say that you will be doing gives the impression that your mobility/care needs are reduced. If travelling, note if you require a taxi or help from a friend. If you have care needs, you should outline the support you are getting. This information can be copied to the DLA or PIP office.
Important: Keep a copy of the PW1 form and letter to the DLA or PIP office. This is your proof, should DWP mislay things.
Income that is ignored for Employment and Support Allowance (income related)
• Childminders are treated as self-employed. Your net profit is treated as one-third of your earnings after expenses are deducted.
• Adoption and fostering allowances, child arrangement and kinship care order payments
• Rental income from a spare room in a claimant’s home on an informal basis
• Financial support from a charity or help from payments given by relative or friend
• Selling a possession that has been owned for some time.
If you also receive Disability Living Allowance or Personal Independence Payment, these benefits are not affected by earnings or savings
Do you receive Employment and Support Allowance contribution based together with Universal Credit for housing costs? If so, both sets of earning rules apply. See the HIP article on Universal Credit and earnings [Issue 170]. You can earn up to £140 a week but your UC will be reduced if your earnings exceed the work allowance of £292 month.
Do you receive Support for Mortgage Interest Loan? If so, your earnings will reduce SMI loan payments £1 for £1. You will not be better off.
The above guidance is a simplified version of complex benefit rules. It is always wise to get independent advice on individual circumstances, especially if you are being encouraged to transfer to Universal Credit from another benefit.
The Citizens Advice Bureau provides independent free confidential advice at local offices, on the phone and online: www.citizensadvice.org.uk Advice line 0800 144 8848.
The DWP provides guidance on the law for Jobcentre staff in the following link. Go to Chapters 50 and 51 for rules on income that is ignored for ESA. https://tinyurl.com/ESA-Guide
• Judy Scott is an independent welfare rights advisor. www.judyscottconsult.com Judy regrets she cannot answer personal queries.
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