Earning While on JSA

eslade

I strongly suspect that my ex-husband is committing fraud.


He claims Job Seeker's Allowance and works 8.5 hours a week - two evenings a week. His work is in a self-employed capacity and his yearly accounts have just been completed. These show that he has brought in over £20,000 as gross income from his customers. The accounts also show that he has spent out £23,000 in expenses. £10,000 of that is to "Freelance Staff". It appears that he is paying other people, taking no drawings for himself, while receiving benefit to support his business losses.


The Child Support/Maintenance Service have sent me a yearly update, confirming that he is eligible to pay zero towards the three children. They are clearly of the belief that he is a man who is not earning.


I suspect fraud on a number of levels. Is it plausible that a man who can generate an income of over £20,000 in only two evenings a week can possibly be eligible to receive a state benefit? My hunch is that he is making himself run at a loss quite deliberately, in order to avoid maintenance and to stay on benefits. I also wonder who all his freelance staff are and whether he is one of his own staff. He spends lavishly on the children when he takes them out.


I have already reported this as benefit fraud but nothing appears to have happened. Can anybody advise on this please?

paragon909

eslade wrote: »

I strongly suspect that my ex-husband is committing fraud.


He claims Job Seeker's Allowance and works 8.5 hours a week - two evenings a week. His work is in a self-employed capacity and his yearly accounts have just been completed. These show that he has brought in over £20,000 as gross income from his customers. The accounts also show that he has spent out £23,000 in expenses. £10,000 of that is to "Freelance Staff". It appears that he is paying other people, taking no drawings for himself, while receiving benefit to support his business losses.


The Child Support/Maintenance Service have sent me a yearly update, confirming that he is eligible to pay zero towards the three children. They are clearly of the belief that he is a man who is not earning.


I suspect fraud on a number of levels. Is it plausible that a man who can generate an income of over £20,000 in only two evenings a week can possibly be eligible to receive a state benefit? My hunch is that he is making himself run at a loss quite deliberately, in order to avoid maintenance and to stay on benefits. I also wonder who all his freelance staff are and whether he is one of his own staff. He spends lavishly on the children when he takes them out.


I have already reported this as benefit fraud but nothing appears to have happened. Can anybody advise on this please?

Seems like you maybe a tad jealous and be bitter towards him.

You reported it to DWP etc, What do you expect them to do to him, You would probably wish he could be hung drawn and quartered, DWP won't inform you what action they take, They won't give you updates. I suspect you want to know to feel some sort of satisfaction, Of course benefit fraud shouldn't be tolerated.

There is no advice people can give you.

eslade

Right. I think, the question I need help with then is probably more about permitted earnings while on benefits. There is a cap, surely? Or can anyone advise whether running at a loss is actually permitted?

HappyMJ

eslade wrote: »

Right. I think, the question I need help with then is probably more about permitted earnings while on benefits. There is a cap, surely? Or can anyone advise whether running at a loss is actually permitted?

A claimant can work a few hours a week and make a loss.

He could work a few more hours and get working tax credits which aren't much different to JSA.

eslade

Ah. Ok. So it might well be legitimate. I guess it is down to his advisor at the Job Centre to encourage him to up his hours and step over to working tax credit.

HappyMJ

eslade wrote: »

Ah. Ok. So it might well be legitimate. I guess it is down to his advisor at the Job Centre to encourage him to up his hours and step over to working tax credit.

I doubt it but all you can do is report the matter to benefit fraud department and leave it to them.

Unfortunately self employed parents are very hard to get money out of as it is very easy to manipulate one's own income to show a loss.

He's got to be earning something. Where is the £3,000 loss being funded from? Is he getting into debt to support the business? The £75 a week he gets for looking for work would barely cover his living costs. I doubt it's supporting a failing business.

paragon909

I believe Britain should adopt the America approach to Child maintenance, We seemed to have adopted everything else.

Like parents going to jail if they don't pay, They lose their driving licence until the pay up. Or have their wages garnished (which i think they do in the UK) But not to self employed people because they aren't classed as employed.

HappyMJ

paragon909 wrote: »

I believe Britain should adopt the America approach to Child maintenance, We seemed to have adopted everything else.

Like parents going to jail if they don't pay, They lose their driving licence until the pay up. Or have their wages garnished (which i think they do in the UK) But not to self employed people because they aren't classed as employed.

A non paying parent can go to jail if they refuse to pay a court ordered amount.

https://www.gov.uk/child-maintenance/nonpayment-what-happens

The problem in this case is the paying parent is declaring a very low or NIL income which would create a liability of just £7 per week. Any sensible paying parent would pay that to avoid the possible sanctions. As the paying parent is on benefits the paying parent's benefit can be used to pay the receiving parent and the paying parent would never be at risk of a prison term.

Prison is used for non paying parents with a self employed income that refuse to hand any of it over and don't have money in the bank and there is no other means of enforcement that can be used against them.

mrsm

There's something I don't understand though? Can the benefit system really be expected to support a financial loss when earning potential is so high ? Over £20k for 2 evenings work is much more than many people earn.
Does it mean as a therapist I could work for 10 hrs a week, charge £50 an hour that gives me a personal income of £25k. I then spend say £10k in legitatmate expenses then decided to pay my secretary and cleaner way more than the going rate and make a loss that the benefit system would support just beause my hobby isn't making a profit on paper ?

eslade

mrsm wrote: »

There's something I don't understand though? Can the benefit system really be expected to support a financial loss when earning potential is so high ? Over £20k for 2 evenings work is much more than many people earn.
Does it mean as a therapist I could work for 10 hrs a week, charge £50 an hour that gives me a personal income of £25k. I then spend say £10k in legitatmate expenses then decided to pay my secretary and cleaner way more than the going rate and make a loss that the benefit system would support just beause my hobby isn't making a profit on paper ?

Yes, this is the point. I have found information about those earning through "hobbies" - casual income through ebay, carboot sales - and how HMRC are interested in tax payable on such earnings. But this is the equivalent in reverse - running a business as an apparent hobby and paying no tax. This hobby puts nothing into the system, while drawing from the taxes paid by others as a benefit.


At its worse you could have a solicitor (for example) working less than the permitted 16 hours a week, claiming benefits, while charging £180.00 per hour for the few hours of "work" they undertake. A bit of creative accounting could write off profits as legitimate taxable expenses. S/he could pay a couple of freelancers as administrator and secretary. The child support agency only know about the benefits, which may be a non-eligible benefit, and this person can thus avoid maintenance responsibilities to their children and sit around for the most part of the week, doing very little.


£20,000 is a lot of money to generate in only two evenings a week. Is it HMRC who would be responsible for challenging why such a capable earner is on Job Seeker's Allowance?

eslade

HappyMJ wrote: »

A non paying parent can go to jail if they refuse to pay a court ordered amount.

The problem in this case is the paying parent is declaring a very low or NIL income which would create a liability of just £7 per week. Any sensible paying parent would pay that to avoid the possible sanctions. As the paying parent is on benefits the paying parent's benefit can be used to pay the receiving parent and the paying parent would never be at risk of a prison term.

Prison is used for non paying parents with a self employed income that refuse to hand any of it over and don't have money in the bank and there is no other means of enforcement that can be used against them.

In terms of maintenance, if he isn't eligible to pay a penny that is completely fair enough; provided the decision has been based upon a full and frank picture of his earnings. He is, however, proudly earning and declaring a very healthy gross income. Meanwhile, freelance staff are being paid. He is not apparently paying himself and his girls are not being supported by their dad.