Universal Credit Back To Work

weedave111

Hi all,

I hope you're all well?! I am currently on ESA Contribution Based and I am looking at trying to go back to work part time as a self employed Painter and Decorator. My wife is unemployed due to Covid. We are on UC. We have a Daughter in Uni aged 21 and a Son doing A Levels aged 18. We currently get help with rent and council tax and we usually get paid around £900 per month from UC. Could anyone please advise me how many hours I can work so it doesn't leave us too worse off than we are at the moment. I understand I'll lose my ESA and also Council Tax entitlement. I have mental health issues and also suffer with arthritis in all my joints so I'm only thinking of part time at present to see how I get on. I was awarded ESA for mental health back in January 2019. I was in the support group. I was getting approx. £245 every two weeks and it went down to £219 in February this year. I will be getting paid £10 per hour and tax will come out of that at 20%. I have used the calculator but didn't make any sense to me. Could you good people please advise on how many hours I should do please? Thank you so much. Stay safe.

Regards,
Dave.

Spoonie_Turtle

weedave111 said:

Hi all,

I hope you're all well?! I am currently on ESA Contribution Based and I am looking at trying to go back to work part time as a self employed Painter and Decorator. My wife is unemployed due to Covid. We are on UC. We have a Daughter in Uni aged 21 and a Son doing A Levels aged 18. We currently get help with rent and council tax and we usually get paid around £900 per month from UC. Could anyone please advise me how many hours I can work so it doesn't leave us too worse off than we are at the moment. I understand I'll lose my ESA and also Council Tax entitlement. I have mental health issues and also suffer with arthritis in all my joints so I'm only thinking of part time at present to see how I get on. I was awarded ESA for mental health back in January 2019. I was in the support group. I was getting approx. £245 every two weeks and it went down to £219 in February this year. I will be getting paid £10 per hour and tax will come out of that at 20%. I have used the calculator but didn't make any sense to me. Could you good people please advise on how many hours I should do please? Thank you so much. Stay safe.

Regards,
Dave.

You will have the work allowance of £292 per month which is how much of any earnings are ignored before it affects your UC.  63% of any earnings above that will be deducted from your UC.  The good thing is that UC will take into account variable earnings, there is no 'cliff edge' where you suddenly lose all your benefits.

Edit: for UC self-employed earnings are calculated as 'income - expenses' and you submit the information at the end of each month.  Expenses include tax when you pay it, fuel, materials, etc.  It is on a cash basis so you report the income in the assessment period you receive it and the expenses in the assessment period you pay for them.

With the ESA you are permitted to work for an average of less than 16 hours per week and earn up to £143 per week - although if it contradicts the reasons you are claiming then be prepared for that to go against you when they decide to reassess you (this may not be a problem if you're fine with working alone but not with working with/dealing with people all day).

I do not know how earnings would affect Council Tax Support; councils seem to have different rules but I don't know if there are any applicable fundamental rules they all have to follow.

poppy12345

No one can tell you how many hours you should work, that's entirely your decision, although if 16 hours or more then your ESA will end. If you work less than 16 hours then you will need to inform DWP and fill out a form (PW1)  and return it to DWP. You will also need to report the changes onto your journal. If you're going to be self employed then you will need to report your earnings and expenses onto your journal each month.

calcotti

Note that if your ESA ends this doesn't affect your overall income because the ESA is being deducted from your UC anyway.

weedave111

Hi folks, thank you so much for the great advice. I'll start on 2 days a week and see how I get on. I'm more concerned about my arthritis at work but my esa was based on mental health issues I suffer with but I feel better now so don't need the esa support now. I'm not concerned if I lose it. Thanks again for the great help.

sammyjammy

Assuming an 8 hour day £10 an hour is very low for a self employed qualified painter and decorator?

weedave111

poppy12345 said:

No one can tell you how many hours you should work, that's entirely your decision, although if 16 hours or more then your ESA will end. If you work less than 16 hours then you will need to inform DWP and fill out a form (PW1)  and return it to DWP. You will also need to report the changes onto your journal. If you're going to be self employed then you will need to report your earnings and expenses onto your journal each month.

Hi Poppy,

In regards to the expenses part will I have to send them the receipts every month as well as telling them on my journal? I know I'll have to do a self assessment every year so I'll need receipts for that. Will they compare the expenses on my journal to the total cost of the receipts and then deduct/refund me? Thanks.

weedave111

sammyjammy said:

Assuming an 8 hour day £10 an hour is very low for a self employed qualified painter and decorator?

Hi,

I'm not a fully qualified Painter and Decorator. I did it a long time ago but never went to college. If all goes well the hourly wage might go up. Are you a Decorator? Thanks.

poppy12345

weedave111 said:

Hi folks, thank you so much for the great advice. I'll start on 2 days a week and see how I get on. I'm more concerned about my arthritis at work but my esa was based on mental health issues I suffer with but I feel better now so don't need the esa support now. I'm not concerned if I lose it. Thanks again for the great help.

If your health condition has improved then you should report those changes. Do remember also that your UC award includes the LCWRA element ( ESA Support Group equivalent)

There's some information here about self employed and UC. https://www.gov.uk/self-employment-and-universal-credit

calcotti

More detailed guidance here
https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide

Spoonie_Turtle

My comment above assumed you still qualified for ESA / LCW (WRAG equivalent) or LCWRA (Support Group equivalent) which would mean the minimum income floor wouldn't apply.  If you are 100% sure you are better enough not to qualify for ESA / the health component of UC then yes you need to understand the MIF which would apply to you after 12 months of setting up.  However if your health would prevent you from working full-time by the end of the 12 months then you need to consider your next steps very carefully.  If you tell them you are fit for work (or if they assess you to be) then there will be no concession and you will have to meet the MIF unless you can survive on considerably less UC without the income to make it up.

By the way, just to check, how long have you been feeling better?  It does kind of average over the year so if you have better months and worse months, the better months don't automatically override the rest.  Especially when it comes to mental health, it's good to be absolutely and completely sure in case feeling better doesn't last.  You don't want to mistakenly do something that will cause yourself difficulty in the long run. 

If you really are definitely feeling better consistently for the majority of the time, then that's great, long may it continue.