advise needed on coming of (sickness) benefits and working for myself

tc1992

i am currently on (long term) sickness benefit (income support) and housing benefit.
i have an idea for setting up my own online trading business (in an area i have some experience in), with a view to coming off benfits.

my first aim would to be making enough money so that i could take a wage equivalent of at least jobseekers allowance, £67.50, every week.
so would probably need to turn over about £180 / week sales: £70 wage, £20 sellers fees, £10 expenses, £80 to reinvest in stock


like i say i have experience in this business area, but i've never set up a business before, but i believe i can get to this level in a few months - maybe 3 - 5 months

so my question is, if (for example during the first month), i make enough money to take average £35 a week in wage, how would this work with benfits.
would i be entitled to any benefits at all (e.g. a top up to the level of jobseekers allowance?) or would i just have to live on the £35

also if i hit a target of say £70 a week wage, then will i still be entitled to my housing benefit at this point.

salau2

You could (if you still meet the disability criteria, i.e. number of points on IB50 form) continue to claim Income Support. This would be reduced by earnings, though some earrings would be disregarded:

£20 per week of your earnings will not be counted if your applicable amount includes:

• the disability premium
• or the severe disability premium
• or the carer premium (where the carer is working).

If you no longer meet the criteria for your IS you could claim JSA (top-up) providing you meet those requirements (i.e. how many hours you are working etc…). The rules for ESA-IR are generally much more favourable for those wishing to work as you can do permitted work for up to 16 hours per week and earnings up to £97.50 may be wholly disregarded for up to 52 weeks. Therefore, if you meet the Limited Capability Assessment for ESA (15 points) it may be advantageous to claim ESA and work less than 16 hours per week and earn less than £97.50. Also there is a possible entitlement to Working Tax Credits if you meet the criteria. I.e. work more than 30 hours per week.

You may continue to be entitled to Housing Benefit if you lose benefit; moreover, there is also an earnings disregard in the calculation. There may be additional support provided by a discretionary housing payment if not entitled to Housing Benefit. You should seek advice from CAB/Welfare rights as can be a complex area.

[Deleted User]

if you rent either private or social housing then you will need the LL permission to use your home to run a business from,it may also entail paying busuness rates,you will also need insurance for your stock etc
i take it you are going to trade through ebay?very few people manage to make ebay businesses pay year round,you will also need to register as self employed with HMRC

tc1992

salau2 wrote: »

You could (if you still meet the disability criteria, i.e. number of points on IB50 form) continue to claim Income Support. This would be reduced by earnings, though some earrings would be disregarded:

£20 per week of your earnings will not be counted if your applicable amount includes:

• the disability premium
• or the severe disability premium
• or the carer premium (where the carer is working).

If you no longer meet the criteria for your IS you could claim JSA (top-up) providing you meet those requirements (i.e. how many hours you are working etc…). The rules for ESA-IR are generally much more favourable for those wishing to work as you can do permitted work for up to 16 hours per week and earnings up to £97.50 may be wholly disregarded for up to 52 weeks. Therefore, if you meet the Limited Capability Assessment for ESA (15 points) it may be advantageous to claim ESA and work less than 16 hours per week and earn less than £97.50. Also there is a possible entitlement to Working Tax Credits if you meet the criteria. I.e. work more than 30 hours per week.

You may continue to be entitled to Housing Benefit if you lose benefit; moreover, there is also an earnings disregard in the calculation. There may be additional support provided by a discretionary housing payment if not entitled to Housing Benefit. You should seek advice from CAB/Welfare rights as can be a complex area.

that sound's complicated.
the way i see it is that if i show i am capable of working then surely i won't be able to claim Income Support for sickness, as i am clearly showing i am working in at least some capacity.
Or is this Limited Capability Assessment that you are mentioning somewhere between Jobseekers and Income Support (sickness).

I want to work more than 16 hours a week. I would be looking more at the 30 mark. it doesn't matter to me at this point if my pay per hour is very low, as i would be expanding my business (i.e. stock) for the near future, and i really want to get off Income Support. I think i need to talk to somene at the job centre. I certainly won't be making more than £97.50 for the first few months, but will defintaely be working more than 16 hr/week

tc1992

woodbine wrote: »

if you rent either private or social housing then you will need the LL permission to use your home to run a business from,it may also entail paying busuness rates,you will also need insurance for your stock etc
i take it you are going to trade through ebay?very few people manage to make ebay businesses pay year round,you will also need to register as self employed with HMRC

yes, there are a number of things that i need to learn about on the set up side of things, inurance is one thing i need to consider (i have home insurance at the moment).

as regarding the business, it is trading vinyl and CDs, an area i have some experience in. as far as my landlord could tell (not that he has been to my flat in 2 or 3 yeras), it just looks like a normal flat with a good few records and CDs in. Although i guess there are legal implications with this

Most of my business would be done through a site called Discogs. I am aware that to make an online business work all year round takes a lot of work, but i think it is possible. I reckon once my stock levels get high enough i should be able to make enough wage to match minumum wage. If i can work getting on for normal weekly hours then i can get off all benefits (although to build to this level, i think will take 9 months - year of stock building)

salau2

Yes it can be a complicated hence CAB would generally be your best bet. If you want to work 30 or more hours per week you will generally be excluded from IS, JSA and ESA. You may be entitled to Working Tax Credits with a disability premium added (subject to criteria) as you claimed Income Support with a disability premium within the last 6 months before you claimed tax credits (condition 2 – you have a disability that puts you at a disadvantage in getting a job).

Claiming ESA is not about being ‘sick’ or unable to work it is about having limited capability to work. So you may feel like you can work as many ESA claimants do but they still meet the work capability assessment, e.g. due to poor mobility. Moreover, Permitted Work under ESA gives claimants the opportunity to see if they can work, for example if you work 15 hours per week and say in 3 months’ time you decide that you don’t have the strength/stamina to work then the benefit is still there. Otherwise it means reapplying and for some they no longer meet the NI contributions criteria so lose benefit altogether.

The choice is yours; there are a number of options available. You can consider them and speak to CAB/welfare rights who can give you your options.

Regarding your business… please contact Business Link on 0845 600 9 006 who will give you all the necessary information on starting up a business. Call TaxAid on 0345 120 3779 for advice regarding tax.

tc1992

salau2, thanks that is very usefull, i will get in touch with the CAB. do you know of any websites you woulld recommend for info on business start up. i'm going to have a google

salau2

Yes business link - businesslink.gov.uk and startups.co.uk

rogerblack

Under ESA-IR - the permitted work rules are awkward for self employment, though offer some interesting possibilities.

For example.
You can earn up to 20 pounds a week, without it affecting your benefit.
This can be an unlimited amount of hours.
It's not simple, as for a meaningful enterprise, you need to carefully structure your buisness so that the average income falls below 20 pounds a week.
There is a long list of allowed expenses, from a portion of your heating/lighting/... used in the buisness, to some NI contributions, tax, half private pension contributions.

The income is averaged over a period, if not steady.
As I understand it income on JSA is simple 'how much money do you get' - with far fewer allowable exceptions.

Of course, while it says in the decision makers guide that permitted work is not to be taken into account usually, 30 hours may raise questions.

tc1992

rogerblack wrote: »

Under ESA-IR - the permitted work rules are awkward for self employment, though offer some interesting possibilities.

For example.
You can earn up to 20 pounds a week, without it affecting your benefit.
This can be an unlimited amount of hours.
It's not simple, as for a meaningful enterprise, you need to carefully structure your buisness so that the average income falls below 20 pounds a week.
There is a long list of allowed expenses, from a portion of your heating/lighting/... used in the buisness, to some NI contributions, tax, half private pension contributions.

The income is averaged over a period, if not steady.
As I understand it income on JSA is simple 'how much money do you get' - with far fewer allowable exceptions.

Of course, while it says in the decision makers guide that permitted work is not to be taken into account usually, 30 hours may raise questions.

thanks, i'm going to contact the CAB

Lynella

Good luck keep us posted..let us know what CAB say.