Best Way to Come Off Benefits Gradually

TryingToWork

OK, well I've added it all up including DLA this time, and triple checked it.

And they don't make it easy to become self employed do they?

If I've got this correct - if I earned £100 a month I would get £304.80 a month less in total than I do now every month on full benefits.

This is exactly what I was concerned about.

Total Catch 22.

BigAunty

TryingToWork wrote: »

...

If I've got this correct - if I earned £100 a month I would get £304.80 a month less in total than I do now every month on full benefits.

...

Double check this on the Turn2us online benefit calculator - does this figure include or exclude receipt of Working Tax Credits?

I believe those with disabilities can work 16 hours per week to qualify for WTC and there is an extra premium that come with this.

See the info here

http://www.hmrc.gov.uk/taxcredits/payments-entitlement/other-benefits/affect-taxcredits/disability-benefits.htm

You should also understand the proposed changes when the Universal Credit system is introduced - google and unearth the proposal paper. The whole purpose is to make work pay more than being on benefits, which as you have identified, is not necessarily the case now for all households.

I don't know the specific changes as they relate to those on sickness/disability benefits but there is a push to encourage the self employed to be more self-sufficient and try to earn at least the National Minimum Wage, otherwise have some kind of conditionality akin to Job Seekers Allowance to find other work. You anticipate earning approx £1.50 an hour....The proposal paper will give you an idea whether those with sickness/disability benefits are exempt from this kind of additional requirement to find income elsewhere if their Self Employment earnings are very low.

TryingToWork

BigAunty wrote: »

Double check this on the Turn2us online benefit calculator - does this figure include or exclude receipt of Working Tax Credits?

I believe those with disabilities can work 16 hours per week to qualify for WTC and there is an extra premium that come with this.

See the info here [link removed]
You should also understand the proposed changes when the Universal Credit system is introduced - google and unearth the proposal paper. The whole purpose is to make work pay more than being on benefits, which as you have identified, is not necessarily the case now for all households.

I don't know the specific changes as they relate to those on sickness/disability benefits but there is a push to encourage the self employed to be more self-sufficient and try to earn at least the National Minimum Wage, otherwise have some kind of conditionality akin to Job Seekers Allowance to find other work. You anticipate earning approx £1.50 an hour....The proposal paper will give you an idea whether those with sickness/disability benefits are exempt from this kind of additional requirement to find income elsewhere if their Self Employment earnings are very low.

Thanks but it certainly is NOT my goal to earn £100 a month!

But I want to be assured that in the very beginning (ie; STOP getting full benefits), that I can still pay the bills. That is the only reason that figure is so low. Sorry I thought that was clear from what I wrote in the first post.

It seems I will not be able to pay the bills.

Secondly, I know people are saying tax credits is the way to go, but when I answered all the questions truthfully it came up with £0.00 for Tax Credits. I don't know what triggered that. But it could have been because I said I was on IB instead of ESA (when it seems the rest of the world is now on ESA instead??)

I tried putting more income in. I put £1000 a month in and the result was as bad. I would get nothing but an 81p reduction on my rent each week!

I also found it very confusing and inflexible to my personal situation. For example, it asks am I "incapable of working more than 52 weeks?"

The answer is Yes if for an employer (see 1st post for why) but No if self employed.

So it looks a bit stupid to say Yes to this question but say I'm on full long term IB - yet this is the truth.

And the two different answers gave the same amount in benefits anyway!

I will look at the further info thanks

BigAunty

TryingToWork wrote: »

...

Secondly, I know people are saying tax credits is the way to go, but when I answered all the questions truthfully it came up with £0.00 for Tax Credits. I don't know what triggered that. But it could have been because I said I was on IB instead of ESA (when it seems the rest of the world is now on ESA instead??)

What does your Income Support, Incapacity Benefit
and low rate DLA come to each week? About £125 per week?

You should be modelling one or more future scenario(s). I got the impression from the previous advice that one anticipated scenario is that you would not be claiming IB because you would be self employed and therefore not eligible to claim a benefit for those too incapacitated to work....

If I understand the earlier advice correctly, you would lose IB, perhaps IS but retain DLA, receive WTC (with an extra premium) and employment income, plus be eligible for some or all of your HB and council tax discount (this depends on income).

I don't know if you will be better off but I don't think you can make this judgement until such time that the calculator focusses on receipt of WTC. But it is correct that there is a steep withdrawal of benefits when a person enters employment which is known to act as a deterrant for some households and which is supposed to be addressed by future benefit changes.

EDIT - According to the HMRC site, some IB is counted and some types of IB are excluded when it comes to calculating tax credits. Full info here

Disability benefits that don't count towards your income
These benefits don't count towards your income when your tax credits are worked out:

• Disability Living Allowance
• Attendance Allowance
• Incapacity Benefit (at the short term lower rate paid for the first 28 weeks)
• Incapacity Benefit - if you claimed it before 1995 and have received it ever since
• income-related Employment and Support Allowance
• Severe Disablement Allowance
• Industrial Injuries Disablement Benefit

Disability benefits that do count towards your income

These benefits do count towards your income when your tax credits are worked out:

• Incapacity Benefit paid at short term higher or long term rates - 29 weeks or more
• contribution-based Employment and Support Allowance
• Carer's Allowance – including any dependency increases

TryingToWork

BigAunty wrote: »

What does your Income Support, Incapacity Benefit
and low rate DLA come to each week? About £125 per week?

You should be modelling one or more future scenario(s). I got the impression from the previous advice that one anticipated scenario is that you would not be claiming IB because you would be self employed and therefore not eligible to claim a benefit for those too incapacitated to work....

If I understand the earlier advice correctly, you would lose IB, perhaps IS but retain DLA, receive WTC (with an extra premium) and employment income, plus be eligible for some or all of your HB and council tax discount (this depends on income).

I don't know if you will be better off but I don't think you can make this judgement until such time that the calculator focusses on receipt of WTC. But it is correct that there is a steep withdrawal of benefits when a person enters employment which is known to act as a deterrant for some households and which is supposed to be addressed by future benefit changes.

Thanks for your prompt reply.

In that case, I have misunderstood the questions in the calculator.

When it asks if I am in receipt of IB I have put yes, (because I AM now!)

But I also had to pretend I started self employment today, as it is incapable of predicting what you COULD be on in a future scenario.

Because I did not know what benefits I would be on in the future, I put IB, but I guess not.

I am 44 and get middle care and low mobility so altogether I think I get £226.38 a week. Sorry I thought I was on low rate for both.

I get £980.98 each month (average over the year) into my bank account, but that does not include HB and CTB as I am a council tenant so they get paid separately.

I was hoping I had calculated it wrong and that I could get more benefits while starting out. (I usually mess up forms and questionnaires - I am not good at that stuff. I have had support workers to do that for me in the past).

I am stuck at this point because I have no idea about other benefits that I might be elegible for once I start working.

UPDATE:
I just tried again doing the online form and pretended I was getting NO benefits at all, just working.

But I hit a brick wall when I got the same familair questions as on the DLA form after asnwering "are you sick but do not claim benefits?"

I was useless at filling this in because the questions are too inflexible and the answers are NOT black and white. The support worker knew how to do it though. I can't face that damn form again. I found it depressing enough the last two times.

I will try to get myself another support worker.

thanks

missapril75

TryingToWork wrote: »

I want to be assured that in the very beginning (ie; STOP getting full benefits), that I can still pay the bills.

Did someone mention that Housing Benefit can continue to be paid - four weeks is it?

BigAunty

I appreciate that a significant proportion of your income arises because of your sickness and disabilities which themselves are costly to deal with but I think we’ve got to the nub of the matter which is that you maybe in a classic benefit trap for which the system (not the claimant) is to blame, plus the fact that we live in a high cost/low wage economy which means that a person can work full time but still not afford to pay the rent from thefruits of their labour.

Your disposable weekly income of £226 which comes from IB, IS and DLA is nearly x4 the sum of someone single on Job Seekers Allowance, therefore they have a much better springboard into being off in employment.

In fact, you currently net more than someone who works full time on the National Minimum Wage who will generally get £192 after tax for a 35 hour week and on this sum, they are unlikely to qualify for full housing benefit and perhaps full council tax discount. However, obviously they do not have any extra expenses associated with sickness/disability to contend with.

For example, this person on the NMW in private accommodation of £600 per month might qualify for £15 per week working tax credits but would only qualify for £75 per week housing benefit. This means that while they would net £207 per week (still less than you get each week), they would have to pay £75 per week in rent after their HB, leaving them with £132 disposable income. This is just over half of what you receive and you have no outlay on rent or council tax whatsoever. But as I've said, I am comparing apples with pears as your situation is different.

Assuming, for example, your council rent and council tax is £500 per month (just a finger in the air guess-timate of mine), then you are receiving in benefits the equivalent of a £22,500 gross salary, which is the greater than two people working full time on the NMW or one person earning £12.36 an hour. This would be a stretch for anyone to earn, let alone someone with sicknesses and disabilities to manage.

I played about with the Turn2us online benefit calculator and put in that you netted £25 per week in employment and I got the impression that you would qualify for £87.78 working tax credits per week, plus your existing £72.40 DLA and your employment income, coming to about £185 per week.

As I don’t know your rent/CT, I couldn’t identify whether you would continue to get full HB and CT discount but I assume so. I also assume that you wouldn’t be entitled to Income Support because you are working 16 hours but another MSE poster may know if this is not correct.

If this is the case, and do get it checked out with a support worker as I also found the calculators quite bewildering, then you do potentially lose around £40 per week moving into part time low income self employment. If so, then I am afraid that you are a victim of the classic benefit trap where the claimant is not actually better off working. For some households, this is actually far bigger as they will additionally have taxes, child care and transport costs to contend with which you do not.

Come back to the forum once you've had expert advice from a support worker to see if my figures have any accuracy or if there is any additional benefits or allowances that I've missed. I am open to a challenge on my figures, I would actually love my theory to be wrong, so that you can enter self employment and be better off for all your effort and drive for self sufficiency, as you desire.

princessdon

I get £980.98 each month (average over the year) into my bank account, but that does not include HB and CTB as I am a council tenant so they get paid separately.


Is that for a single person - and housing benefits are additional or does it cover a couple?

TryingToWork

missapril75 wrote: »

Did someone mention that Housing Benefit can continue to be paid - four weeks is it?

Yes, thanks it is saying I will get full housing and council tax benefit.
thanks

princessdon wrote: »

I get £980.98 each month (average over the year) into my bank account, but that does not include HB and CTB as I am a council tenant so they get paid separately.

Is that for a single person - and housing benefits are additional or does it cover a couple?

I am live on my own, and yes HB and CTB are separate.
thanks

BigAunty:

Thanks a lot for your comprehensive reply. Your estimate of £500 isn't too far off. My rent and council tax would come to £469 a month.

Yes, you are right about me getting a lot more than some people. In fact I wasn't looking forward to coming back onto the forum today, thinking I would not get much sympathy!

I played about with the Turn2us online benefit calculator and put in that you netted £25 per week in employment and I got the impression that you would qualify for £87.78 working tax credits per week, plus your existing £72.40 DLA and your employment income, coming to about £185 per week.

I don't know what you did that was different to me, but I am still getting £0.00 for WTC each time.

But I have got a more encouraging figure now that I have put my brain in the right way round and omitted all IB payments from the equation!

I am now getting told that I would get £156.54 Income Support - so that's more than the WTC that's coming up for you, and £90 more than the IS last time for me.

So if this was true I would only be £200 a month worse off instead of £300 as first thought. I'm already able to put £150 away each month for contingencies, and can still manage, so it should not be too difficult to find a way to save an extra £50.

So I'm feeling much better today than I was yesterday! :T

thanks

Anubis_2

WTC goes off the year before income - which for you is benefits. So you can tick what benefits you are on, put the amount of hours worked, an income amount from working but do NOT include IS - as your IS is not a taxable benefit normally (there are exceptions to this)

Incapacity Benefit paid at short term higher or long term rates - 29 weeks or more is classed as income so should be added up and put in the income field. DLA are noted, but should not be added up in the income field.

If you put IS anywhere in the WTC you will get zero WTC which I believe is what is happening.