What benefits exist for zero hours contract work which does not pay the bills

moneyunwise

I know someone who is 21 and is currently living in temporary accommodation because they were homeless and vulnerable. They have started a door to door sales job and it is 100% commission (zero hours contract) so if they get no sales, they have no income. They are being moved into new accommodation soon because they now have a job and there are people desperate for temporary accommodation. 

There is no way their job will cover food, rent and utilities because of the low commission and number of likely sales.

They have "been told" that they cannot get benefits because of the number of hours that the job is (I don't know exactly but let's say it is 35 i.e. 7x5). 

I don't know the nature of the new accommodation but it will be connected to the local authority in some way.

Regardless of your accommodation and the number of hours that you work, if you are 21 and cannot pay the bills then what benefits can you get?

Other support options such as family are not available.

TELLIT01

Potentially Universal Credit but others will know more about the requirements of that.

This may be of interest https://keepinghrsimple.co.uk/legal-hire-commission-sales-people/  To paraphrase it, it is illegal to employ somebody on commission only unless they are also guaranteed the NMW.

sarahlply

My husband works part time and his hours vary depending on how poorly I am, uc then adjust our award each month when his payroll update him, does cause issues with council tax support though but so long as you update them then they adjust monthly too but think some areas not so flexible!

Spoonie_Turtle

Yes, Universal Credit, but it probably won't cover the bills - maximum for a single person under 25 would be £292.11 per month plus the shared accommodation rate for their area (multiply the weekly rate by 52 and divide by 12 for the monthly amount) https://lha-direct.voa.gov.uk/

They would also be required to attend appointments and search for more (different) work if their earnings are below a certain threshold - bit difficult if they're having to work essentially full-time for no guaranteed pay.  That is a highly suspicious arrangement though as pointed out above; zero-hours contracts are bad enough but this sounds like a zero-pay contract‽

ElwoodBlues

If they're employed, then they have to be paid (at least) minimum wage for the hours that they've done, regardless of any comission element - even if they don't make the targets the employer still has to pay them the min rate (but they'll likely get their contract ended pretty quickly for lack of performance). A zero hours contract only means that the employer doesn't guarantee you a particular number of hours, but they still have to pay you for what hours you have actually done!

So if they're working the 35 hours of your example, they would have to be paid £356 for that. This is what UC will expect - you can't tell them that you're working 35 hours per week on an employed basis and have a lower income. 

Are they definitely working on an employed basis? As that arrangement sounds illegal. Are they really being offered the work on a self employed basis? In that case UC would normally work on the basis that they've earned the 'minimum income floor' (35 hours x min wage), which would put a single claimant (with no dependents or disabilities) beyond eligibility for UC. But there is a start up period where they don't apply the MIF for the first 12 months of your self employment.

Still doesn't sound fair to expect the worker to be reliant on state benefits because the comission/pay if it isn't possible to achieve a living wage on realistically achieveable commission/pay. At the end of the 12 month start up period, when the MIF exemption ends, they'll be struggling again and will have wasted their self employment grace period.

moneyunwise

thanks.

I guess there are 2 parts to this

1. Can someone on zero hours contracts get benefits
2. Can someone on 100% commission get benefits - and this one looks dodgy / I have not been informed correctly 

poppy12345

moneyunwise said:

thanks.

I guess there are 2 parts to this

1. Can someone on zero hours contracts get benefits
2. Can someone on 100% commission get benefits - and this one looks dodgy / I have not been informed correctly 

1/ It will depend on the earnings they receive each month.

2/ I don't know of any job PAYE that would legally pay commission only.

nayathepsychic

moneyunwise said:

thanks.

I guess there are 2 parts to this

1. Can someone on zero hours contracts get benefits
2. Can someone on 100% commission get benefits - and this one looks dodgy / I have not been informed correctly 

To answer your first question here, yes, a zero hour contract has no bearing on whether a person can claim benefits

Secondly, it is illegal to pay only commission, unless that commission is equal to, or greater than national minimum wage. Either you have been given incorrect information, or this person is being "employed" illegally. Please check this with them as perhaps they don't realise they are being scammed. 

DullGreyGuy

moneyunwise said:

1. Can someone on zero hours contracts get benefits
2. Can someone on 100% commission get benefits - and this one looks dodgy / I have not been informed correctly 

They need to clarify their legal position... someone can be 100% commission but if an employee they have a backstop of NMW even if they dont make a single sale. There is a chance that the company is saying they are self employed sales people and as such NMW doesn't apply but the test if this is true is more complex. 

If they are truly self employed benefit claims are judged differently -v- an employee. In both cases however benefits may be available depending on income.

moneyunwise

DullGreyGuy said:

moneyunwise said:

1. Can someone on zero hours contracts get benefits
2. Can someone on 100% commission get benefits - and this one looks dodgy / I have not been informed correctly 

They need to clarify their legal position... someone can be 100% commission but if an employee they have a backstop of NMW even if they dont make a single sale. There is a chance that the company is saying they are self employed sales people and as such NMW doesn't apply but the test if this is true is more complex. 

If they are truly self employed benefit claims are judged differently -v- an employee. In both cases however benefits may be available depending on income.

Thanks for the replies. I have more information.

They are being employed as self-employed. 

So from the replies, they are stuffed.

While out selling, they are paying for snacks as well as transport to the main office (the company arranges travel to and from the selling locations). They are responsible for providing own stationary too. I believe that this can all be offset through tax relief and the company is offering to help through that, but the problem is getting a 21yo to remember to keep receipts. Plus they are not getting enough sales to cover the travel and food.

I had not realised that the gig economy worked like this.

So, what could they still get from the state?

This situation looks untenable for someone who has to pay rent and food and I am wondering if hypothetically they are better quitting the job and being supported for 2 months privately (i.e. someone pays for their basic food and rent) until benefits kicks in.

sammyjammy

I would suggest they chuck this "job" in now, claim benefits and start looking for paid employed work.