If I start working what happens to my ESA and CTC and will I have to move to UC?

IslandintheStream

Hi,
I have looked online and cannot find the answer; I hope someone here can help me; I want to start doing a few hours per week of self-employment.
I have an incurable serious illness and have not been able to work but it has stabilised to some degree. Sudden deterioration is a real risk.
I want to work as self-employed (am very bored), and probably try two days per week. About ££150-250pw gross would be my income. 
I cannot risk ending up in a position where I am worse off through working, which I know is a risk but my health won't allow me to work full time. 

I currently get:
1) ESA (CONT based, so it's an old style one, it's definitely not income based or UC)
2) PIP - higher rate for both
3) CTC.

I am separated and live with two primary school aged children.

I want to find out:
1) If I start working for myself, is this would be classed as a change of circumstances which triggers me across to having to claim UC? (I defo don't want this)
2) If I earn over £131 permitted amount on ESA will I instead be able to claim Carer's Allowance (am a carer for my disabled child) OR will that be classed as a change of circumstances which triggers me across to having to claim UC?
3) Will my CTC stop at the 250pw level of income or will it be supplemented by Working Tax Credit?
4) If my health fails when I am getting Working Tax Credit, I've read that becoming sick when on WTC will trigger a compulsory move at that stage to UC - which I don't want as I'll be a lot worse off than now. 

If any of my working will trigger a move to UC I will end up worse off I think, so trying to work it all out. Perhaps I should try and keep my earning below the £131 pw cap allowed by ESA instead if that would avoid the UC change. 

It's complicated I know - does anyone know the answer please?

calcotti

Starting work is not a change of circumstance requiring you to move to UC.

You are not entitled to ESA if you earn more than £131.50/week or if you work 16 hours or more.

You are not entitled to Carer’s Allowance if you earn more than £123/week so claiming CA instead of ESA is not an option.

it would seem sensible to stay below the ESA limits particularly as you appear unsure how the work may impact your health. Before doing permitted work you should inform DWP https://www.gov.uk/government/publications/employment-and-support-allowance-permitted-work-form/permitted-work-factsheet

if you stay within ESA permitted work limits you will not be working enough hours to qualify for Working Tax Credits.

You can use benefits calculators to test different situations. https://www.gov.uk/benefits-calculators

There are no earnings limits on UC. Given that you say that you are not getting any income based ESA perhaps you will not qualify for UC anyway - it depends on why you are not getting income based ESA. (Are you sure that your ESA doesn’t include any income based elements?)

IslandintheStream

Thanks for your reply Calcotti. I thought I had replied but it hasn't shown up so will try again: 
I have some savings of over £16k so won't get anything on UC I believe? (Hence not wanting to be moved onto it)
The ESA is Cont only. It says (C) ESA or ESA (Cont) in DWP letters.

If I did work to earn more than £131.50 per week, how much would I have to earn before I started to become eligible for WTC please? (I fulfill the disabled requirements of WTC)??

If I started to get WTC but then my condition got a lot worse and I had to stop working altogether, is it your understanding that AT THAT STAGE I would be moved to UC as that would be one of their change of circumstances? or would I still be able to go back to claiming Cont.based ESA again??

I've just been on entitled to and put down 131.49 as my amount per week I would earn under permitted work; the calculation is that I would lose all my ESA (WHY?!) and be a whole £5 per week better off if I worked than now.

IslandintheStream

worked out the last of my questions above - my mistake. It is now saying I could be £131.49 per week better off if I earn that much. 

calcotti

Yes, I wondered if it was savings. Over £16,000 excludes you from income based ESA and would prevent you claiming UC.

For WTC you would need to be working 16 hours/week (this is a reduction from the normal 30 hour requirement if you meet the disabled worker conditions). It is this 16 hour requirement that prevents you getting WTC and ESA at the same time.

If you come off ESA you would not be able to claim it again during 2020 because you would not meet the qualifying NI contributions. To get ‘new style’ ESA (the new version of contribution based ESA) you would need to have paid NI contributions for at least 26 weeks between April 2017 and March 2019 which you have not (you will have NI credits from your ESA and CB but these are not enough). In future, if you are registered as self employed, you will be able to pay Class 2 contributions to meet this requirement.

You would be able to claim Carer’s Allowance but this pays less than ESA Support Group.

If you still had savings over £16,000 you would still be excluded from UC.

As regards the calculator how many hours of work did you enter? If you put 16 hours that would exlude you from ESA.

The earnings limit for ESA (but not the hours limit) will probably rise slightly in April but the figure hasn’t been published yet. I would always recommend aiming to have a safety margin between actual earnings and the earnings limit otherwise there is a risk of going over it accidentally.

IslandintheStream

Thank you for this info, it's really helpful.

If I earnt £250 a week and got some WTC as a result (but no ESA), and if my medical condition worsened and I had to stop working, do you think I will be left in a situation where I couldn't claim ESA at that point, and wouldn't be eligible for UC? ie - I would be a lot worse off than I am right now? The risk of my condition worsening is so high that I cannot risk that happening. At the same time I am so bored right now and need to do something to get occupied and increase my self-worth. 

poppy12345

IslandintheStream said:

Thank you for this info, it's really helpful.

If I earnt £250 a week and got some WTC as a result (but no ESA), and if my medical condition worsened and I had to stop working, do you think I will be left in a situation where I couldn't claim ESA at that point, and wouldn't be eligible for UC? ie - I would be a lot worse off than I am right now?

If this happened during 2020 then you would be £111.65 per week worse off than you are right now, if you have savings of more than £16,000. A claim for New style ESA wouldn't be possible either this year, as advised.

I'd agree with the advice to stay within the permitted work limit.

calcotti

IslandintheStream said:

If I earnt £250 a week and got some WTC as a result (but no ESA), and if my medical condition worsened and I had to stop working, do you think I will be left in a situation where I couldn't claim ESA at that point, and wouldn't be eligible for UC? 

That’s exactly what I was trying to say in my last post. That would be the situation for 2020 (and I think 2021 too). Would not be able to claim new style ESA because not meeting NI requirements, excluded from UC by savings but would be able to claim CA.

having registered as self employed you would be able to pay Class 2 NI contributions (which are cheap) and therefore claim ESA in future if trying to claim in 2022 or later.

I have no idea how much WTC (if any) you would get anyway. Would need to use a calculator to assess this,

it it seems clear to me that you should stay within ESA limits.

if savings drop below £16,000 then could claim UC.