Question about the New Enterprise Allowance payment

Bryn99

If you've read my recent post about my council tax, you'll know that I plan to start my own business using the NEA as a start-up while I'm on Universal Credit.

From everything I've read, the £65 per week you get for the first 3 months (and the £33 you get per week for the second 3 months) replaces the money you get from UC, but not the part of the UC that covers Housing and Council Tax.
Meaning, that once the scheme starts, you still get the money from UC for whatever housing and council tax you're already getting, and the only other money you get is the £65/£33 per week.

Having discussed this briefly this afternoon, my work coach said that the £65/£33 per week was "as well" as the money that I'm currently getting with UC, not instead of whatever was left after council tax & housing.

I questioned this, and they said "no, because it's not likely that they'll expect you to live on £65 a week."
I hesitantly agreed because I thought they knew what they were talking about, but in the back of my mind, I thought to myself "They would!".

So afterwards, I went back and checked all the information I could find on the net, and although I couldn't find one that explicitly stated that it would replace that portion of UC, everything I found implied as much, and found no implication at all that it was "as well as" my current UC.
My work coach admitted that they didn't know everything about the NEA scheme as it wasn't their job, but knew plenty about it, and was sure this was the case.

So I thought I'd ask here, as maybe some of you have experience with the scheme in one way or another.
I'm pretty sure that it will replace it, rather than be as well as, and I have my first call with my NEA business advisor/mentor next week, so I can ask them, but would appreciate your input.

Cheers.

NedS

Your advisor is correct. The NEA payments are in addition to your Universal Credit and are totally disregarded. NEA payments are not considered income for your business, they are not taxable income so do not affect your UC or other means tested benefits.

How much UC you receive each month will depend on how much profit your business is making each month and is in no way affected by the NEA payments.

calcotti

Ned, if you are correct (which I have no reason to doubt) then this page is misleading
https://www.gov.uk/government/publications/jobseekers-allowance-back-to-work-schemes/universal-credit#NEA

money that you get, including New Enterprise Allowance, may be taken into account when calculating your benefit amount.

It would actually be rather pointless if it reduced the UC payable.

poppy12345

Reading through that i just wanted to make sure that you're aware that council tax reduction isn't part of UC and needs to be claimed from your local council.

Bryn99

poppy12345 said:

Reading through that i just wanted to make sure that you're aware that council tax reduction isn't part of UC and needs to be claimed from your local council.

Yeah, the only reason I keep mentioning it is because in all the literature that I've read, it mentions that being on the NEA scheme doesn't affect housing benefits or council tax benefits (CTR).
It's what I get on top of that that's the question; Same as I'm getting now plus the weekly NEA amount, or just the weekly NEA amount?

I wonder if my business advisor/mentor will know when I talk to them next week.
She should, right? lol
I'm starting to wonder.

Ned, it would be nice if you're right, but as you can see from the page that calcotti has quoted, it's not as clear as it could be, and I've found this to be the case on other professional websites talking about the NEA scheme.
It's almost as if none of them really know for sure, so they just say the same thing that that government site says, unable to be any clearer on the subject because the information isn't very clear at the source.

calcotti

I am fairly sure Ned is right otherwise the scheme makes no financial sense. However like you I can’t find anything stating this,
I wonder if the link I found says ‘may’ because there are some specific situations when this could occur.

calcotti

Found this
http://data.parliament.uk/DepositedPapers/Files/DEP2020-0646/99._NEA_v8.0.pdf

Page 6

NEA allowance is disregarded for the purposes of Universal Credit.

huckster

Yes Ned is correct.NEA is a separate payment that does not affect UC.

Bryn99

Thanks for the info and help guys.
From everything you've found and said, it looks like the NEA payments are on top of all UC payments.

As time goes on, and I personally experience how it works, I'll post in this thread for future reference.

Thanks again.