Supported Permitted Work and Tax Credits

SandJ

I posted this question in the CAB thread, but was unable to get a response, so thought maybe someone else could shed some light on it.

My question is, do tax credits count as income under the supported permitted work rules? Can we claim for Working Tax Credit and Child Tax Credit without it effecting our ESA and my husband's supported permitted work? Also, does child benefit count as income? I'm concerned that with him only being allowed to earn 97.50 a week, we may stop receiving our ESA if any of these benefits count as income.

Thanks for your advice.

Anubis_2

You cannot claim WTC on ESA for £97.50 as the PW under the higer rate has to be UNDER 16 hours.

mynameistallulah

Anubis wrote: »

You cannot claim WTC on ESA for £97.50 as the PW under the higer rate has to be UNDER 16 hours.

This is not strictly true, Supported Permitted Work does not have a limit on hours worked. Hence, someone could work sixteen hours and earn £97.28, and so be within the criteria for WTC and ESA. However, I recall from the OP's other thread that they are on IB ESA, so any WTC will reduce their ESA by the same amount, so there is no point in claiming.

SandJ

So Working Tax Credits counts as income then and would reduce his ESA, but he wouldn't lose his ESA? So if we did claim Working Tax Credit, but his job didn't work out, and the WTC stopped, his ESA would then return to the previous amount? Also, what about Child Tax Credit?

Anubis_2

mynameistallulah wrote: »

This is not strictly true, Supported Permitted Work does not have a limit on hours worked. Hence, someone could work sixteen hours and earn £97.28, and so be within the criteria for WTC and ESA. However, I recall from the OP's other thread that they are on IB ESA, so any WTC will reduce their ESA by the same amount, so there is no point in claiming.

Ah yes, supported PW can be more than 16 hours, you are correct.

ESA is counted as income (even CB from what I have been informed) for WTC, but it depends what other benefits the person receives and as they are part of a couple it may be worth claiming. However any reductions in HB and CT may offset this.

For a single person it may not be worth it.

Anubis_2

SandJ wrote: »

So Working Tax Credits counts as income then and would reduce his ESA, but he wouldn't lose his ESA? So if we did claim Working Tax Credit, but his job didn't work out, and the WTC stopped, his ESA would then return to the previous amount? Also, what about Child Tax Credit?

Is he doing supported permitted work through a support worker in a workshop or similar or has he got a job and doing normal permitted work? There is a difference.

Supported Permitted Work means work that is supervised. By someone who is employed by a public or local council or voluntary organisation, whose job it is to arrange work for disabled people. This could be work done in the community or in a sheltered workshop. It also includes work as part of a hospital treatment programme.

I am unsure if WTC reduces ESA, but ESA is counted as income for WTC purposes.

mynameistallulah

Anubis wrote: »

Is he doing supported permitted work through a support worker in a workshop or similar or has he got a job and doing normal permitted work? There is a difference.



I am unsure if WTC reduces ESA, but ESA is counted as income for WTC purposes.

I'm not sure which way round the deduction works either, but I wouldn't ask the question in the first place, bit too much like "benefits maximisation" for me. Having said that I would expect that when the OP advises the DWP they are able to work sixteen hours their entitlement to be in the support group (mentioned in the other thread) will be reviewed.

SandJ

Yes, it will be supported permitted work with a support worker.

Anubis_2

In that case he can apply for tax credits if it is 16 hours or more. His ESA will be counted as income along with his earnings. Be aware that the amount of tax credits may reduce housing benefit and council tax.

In all honesty he may be better off not claiming tax credits. If he doesn't claim tax credits he will be allowed to keep all his income (save for tax and NI if appropriate) and keep his ESA and it won't have any affect on housing benefit or council tax as from 2010 permitted work earnings are excluded when calculating HB and CT from what I have read.

It really is swings and roundabouts. I would advise also seeking more advice from a welfare rights worker as they will be able to let you know exactly what is what.

rogerblack

Anubis wrote: »

In all honesty he may be better off not claiming tax credits. If he doesn't claim tax credits he will be allowed to keep all his income

Very much swings and roundabouts.
One reason why WTC might be a positive is if ESA is questionable for some reason in the future.

If ESA becomes not payable, then the reduction of income is smaller.

Oh for universal credit, when this will all be simple.
(haha)

SandJ

From all the information I've been able to gleam from the HMRC website, and the Turn2us website income related ESA does not effect your WTC. However, I was able to find one website, although a bit out of date, that says WTC is counted under "other income" on ESA and is counted in full, similar to how CA is. How do you work out how much your HB and CTB is reduced based on the income you receive? I'm not sure if it makes a difference, but we receive LHA rather than HB.