Housing Benefit review & self employed low earnings
Noor711
Posts: 46 Forumite
I am wondering if anyone can help.
I am a self employed writer with a disabling health condition and work 16 hours per week. I get full working tax credits (including the disability and severe disability element) and enhanced daily living for PIP. I also get full housing benefit and council tax reduction. I am on very low earnings.
I received a letter from my local council a few weeks ago asking me to fill in a self-employed earnings form (I have no prepared accounts because I cannot afford an accountant) for the last tax year. I did so and sent it off with a financial summary of profit/loss, business invoices and receipts, updates on what I get from PIP and WTC, as well as full bank statements for that tax year. I thought nothing of it because I did the same when I first went self-employed 5 years ago and applied for WTC after being on ESA for 3 years. It was reviewed after the first 6 months with an update on earnings and then again a couple of years later. It was also reviewed again last year for the previous tax year. I have had consistently low earnings but had no issues with the council about my benefits because as it is means tested, I am entitled.
I also underwent the HMRC new tax credits eligibility test on viable self-employment a couple of years ago and my working tax credits claim continued as they were satisfied I was gainfully self-employed with a view to making a profit.
However, today I received a further letter from the council asking me if I really did work 16 hours a week in the last tax year and to explain why my income was so low if I did. I am also asked to explain what I intend to do to increase my earnings in future.
I don't understand why the council is asking me these questions. I thought that HMRC Tax credits would be interested in those matters and to date they haven't reviewed my award even though the same low earnings were declared when I renewed my tax credits in July this year and declared last years low net profit.
It has got me really worried. The nature of my health condition is such that the project I have been working on is taking me longer to complete over the last couple of years because I have to stagger my working hours over the week to work round it. I am working in the expectation of payment because I am contracted to be paid when I deliver it to my commissioning editor. The delivery fee will be small but if further work is commissioned from it which I intend, I will earn a considerable amount in one go. At this point in time, I cannot estimate when I will finish it to deliver and get paid.
I just don't understand why the council are querying my self-employment? They asked:
1. Given that your self-employment gross income for the full tax year is very low please confirm in writing whether or not you worked 16 hours per week during the tax year.
2. If you worked 16 hours per week please confirm in writing why your income is so low. If you did not work 16 hours per week please confirm this in writing and confirm whether or not you have informed the Tax Credit office with evidence.
3. Given your self-employment income is so low, please confirm in writing what steps you are taking or have taken to increase your income to a level you can live on.
Can they ask me these questions? Is it within their remit to do so?
I am going to have to get detailed medical evidence to support what I say about how disabling my condition is such that I can put the hours in but achieve very little in the way of output and therefore remuneration. Incidentally, according to the HMRC Tax Credits Technical Manual, that is well understood about the work of creatives (who are healthy) and is included in their information for their decision makers to take into account. But, will local authority housing benefit decision makers understand this?
What do I do? I feel like they suspect me of wrongdoing by questioning whether I have been working or not. And they have based this suspicion on my low earnings in the last tax year whereas in the previous 5 years they have never questioned this.
Has anyone else had this from their local authority who is self employed on low earnings?
I am a self employed writer with a disabling health condition and work 16 hours per week. I get full working tax credits (including the disability and severe disability element) and enhanced daily living for PIP. I also get full housing benefit and council tax reduction. I am on very low earnings.
I received a letter from my local council a few weeks ago asking me to fill in a self-employed earnings form (I have no prepared accounts because I cannot afford an accountant) for the last tax year. I did so and sent it off with a financial summary of profit/loss, business invoices and receipts, updates on what I get from PIP and WTC, as well as full bank statements for that tax year. I thought nothing of it because I did the same when I first went self-employed 5 years ago and applied for WTC after being on ESA for 3 years. It was reviewed after the first 6 months with an update on earnings and then again a couple of years later. It was also reviewed again last year for the previous tax year. I have had consistently low earnings but had no issues with the council about my benefits because as it is means tested, I am entitled.
I also underwent the HMRC new tax credits eligibility test on viable self-employment a couple of years ago and my working tax credits claim continued as they were satisfied I was gainfully self-employed with a view to making a profit.
However, today I received a further letter from the council asking me if I really did work 16 hours a week in the last tax year and to explain why my income was so low if I did. I am also asked to explain what I intend to do to increase my earnings in future.
I don't understand why the council is asking me these questions. I thought that HMRC Tax credits would be interested in those matters and to date they haven't reviewed my award even though the same low earnings were declared when I renewed my tax credits in July this year and declared last years low net profit.
It has got me really worried. The nature of my health condition is such that the project I have been working on is taking me longer to complete over the last couple of years because I have to stagger my working hours over the week to work round it. I am working in the expectation of payment because I am contracted to be paid when I deliver it to my commissioning editor. The delivery fee will be small but if further work is commissioned from it which I intend, I will earn a considerable amount in one go. At this point in time, I cannot estimate when I will finish it to deliver and get paid.
I just don't understand why the council are querying my self-employment? They asked:
1. Given that your self-employment gross income for the full tax year is very low please confirm in writing whether or not you worked 16 hours per week during the tax year.
2. If you worked 16 hours per week please confirm in writing why your income is so low. If you did not work 16 hours per week please confirm this in writing and confirm whether or not you have informed the Tax Credit office with evidence.
3. Given your self-employment income is so low, please confirm in writing what steps you are taking or have taken to increase your income to a level you can live on.
Can they ask me these questions? Is it within their remit to do so?
I am going to have to get detailed medical evidence to support what I say about how disabling my condition is such that I can put the hours in but achieve very little in the way of output and therefore remuneration. Incidentally, according to the HMRC Tax Credits Technical Manual, that is well understood about the work of creatives (who are healthy) and is included in their information for their decision makers to take into account. But, will local authority housing benefit decision makers understand this?
What do I do? I feel like they suspect me of wrongdoing by questioning whether I have been working or not. And they have based this suspicion on my low earnings in the last tax year whereas in the previous 5 years they have never questioned this.
Has anyone else had this from their local authority who is self employed on low earnings?
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Comments
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As I see it they will question if you only earn x when you work 16 hours when you should earn y
Without you telling us what you do earn its hard to be of much help.0 -
Hello Venison,
I realise that but I am not on universal credit and so I am not subject to being assumed to earning the minimum income floor (16 hrs x national minimum wage). In fact I was earning less than that when I had my tax credits check under their new rules which is triggered when you are earning less than the nmw per week and they were satisfied I was gainfully self employed. I don't get paid regularly. It is fee based - on delivery.0 -
Is there anybody out there who has ever been involved in housing benefit admin/review of self-employed earnings who can help me understand why I am being asked questions about whether I am telling the truth about hours worked or my potential prospects in the labour market?
I sent all my bank statements of all my bank accounts (including savings) and I haven't been asked how I manage to pay bills so I can't imagine I am being questioned on non-disclosure of earnings.
So, it looks like I am being asked about whether I really am working? And how do I intend to make a profit in future if I am? Can the local authority ask me this? This is a means tested benefit. I was not aware there was any conditionality applied on my viability in the labour market when claiming housing benefit and council tax reduction. I simply have to have an eligible rent and sufficiently low income.
What am I missing?
Anybody?0 -
I am wondering if anyone can help.
I am a self employed writer with a disabling health condition and work 16 hours per week. I get full working tax credits (including the disability and severe disability element) and enhanced daily living for PIP. I also get full housing benefit and council tax reduction. I am on very low earnings.
I received a letter from my local council a few weeks ago asking me to fill in a self-employed earnings form (I have no prepared accounts because I cannot afford an accountant) for the last tax year. I did so and sent it off with a financial summary of profit/loss, business invoices and receipts, updates on what I get from PIP and WTC, as well as full bank statements for that tax year. I thought nothing of it because I did the same when I first went self-employed 5 years ago and applied for WTC after being on ESA for 3 years. It was reviewed after the first 6 months with an update on earnings and then again a couple of years later. It was also reviewed again last year for the previous tax year. I have had consistently low earnings but had no issues with the council about my benefits because as it is means tested, I am entitled.
I also underwent the HMRC new tax credits eligibility test on viable self-employment a couple of years ago and my working tax credits claim continued as they were satisfied I was gainfully self-employed with a view to making a profit.
However, today I received a further letter from the council asking me if I really did work 16 hours a week in the last tax year and to explain why my income was so low if I did. I am also asked to explain what I intend to do to increase my earnings in future.
I don't understand why the council is asking me these questions. I thought that HMRC Tax credits would be interested in those matters and to date they haven't reviewed my award even though the same low earnings were declared when I renewed my tax credits in July this year and declared last years low net profit.
It has got me really worried. The nature of my health condition is such that the project I have been working on is taking me longer to complete over the last couple of years because I have to stagger my working hours over the week to work round it. I am working in the expectation of payment because I am contracted to be paid when I deliver it to my commissioning editor. The delivery fee will be small but if further work is commissioned from it which I intend, I will earn a considerable amount in one go. At this point in time, I cannot estimate when I will finish it to deliver and get paid.
I just don't understand why the council are querying my self-employment? They asked:
1. Given that your self-employment gross income for the full tax year is very low please confirm in writing whether or not you worked 16 hours per week during the tax year.
2. If you worked 16 hours per week please confirm in writing why your income is so low. If you did not work 16 hours per week please confirm this in writing and confirm whether or not you have informed the Tax Credit office with evidence.
3. Given your self-employment income is so low, please confirm in writing what steps you are taking or have taken to increase your income to a level you can live on.
Can they ask me these questions? Is it within their remit to do so?
I am going to have to get detailed medical evidence to support what I say about how disabling my condition is such that I can put the hours in but achieve very little in the way of output and therefore remuneration. Incidentally, according to the HMRC Tax Credits Technical Manual, that is well understood about the work of creatives (who are healthy) and is included in their information for their decision makers to take into account. But, will local authority housing benefit decision makers understand this?
What do I do? I feel like they suspect me of wrongdoing by questioning whether I have been working or not. And they have based this suspicion on my low earnings in the last tax year whereas in the previous 5 years they have never questioned this.
Has anyone else had this from their local authority who is self employed on low earnings?
Is it definitely a housing benefit review and not for council tax support? Some councils have adopted the Minimum Income Floor rules from UC for council tax support (not housing benefit)?
IQ0 -
I agree with Icequeen99 that this is likely to be to do with council tax reduction rather than housing benefit.
Reading this:
https://www.lewes-eastbourne.gov.uk/_resources/assets/inline/full/0/210323.pdf
some councils are applying the minimum income floor levels with no apparent reference to tax credit awards.
Have you checked your local council website for information about this?
Without knowing further personal information it is difficult to give information about your next steps but I note that you claim PIP and claimed ESA previously.
Do you receive the severe disability premium with your housing benefit? (check your HB award letter)
If you do, then you could reclaim ESA and perhaps do your work as Permitted Work (there are 'rules' - must be under 16 hrs a week)
Permitted work would not affect your ESA/HB or CTR.
If you do not receive the Severe disability premium in your HB claim then you could claim Universal Credit. Your WTC would end but you could produce fit notes for UC and be assessed for Limited Capability for Work or Limited Capability for Work and Activity.
Perhaps it would be simpler to wait and see the results of the council's enquiries and how it would affect you financially.
Then you could make an appointment with Citizens Advice/welfare advisor to explore your options - ESA/Universal Credit.0 -
Icequeen99 wrote: »Is it definitely a housing benefit review and not for council tax support? Some councils have adopted the Minimum Income Floor rules from UC for council tax support (not housing benefit)?
IQ
Hi Icequeen99,
Yes it is definitely a review of my self employed earnings as part of my housing benefit & council tax reduction claim. I wondered if my local council applies the minimum income floor with regard to council tax reduction but because I am entitled to the severe disability premium as part of my applicable amount, I am exempt from making any contribution to council tax if I qualify for full council tax reduction because my weekly earnings are less than the applicable amount.
In that case, as a 'disabled' self-employed claimant, my low earnings are ignored because I am exempt from making any contribution under their scheme.
So... it can't be that.
It just seems odd that what they are asking me is a duplication of HMRC Working Tax Credits Self-Employed new rules test about whether I am engaged in gainful self-employment with a view to making a profit. And, my low earnings they view as an indication that I could not have been working 16 hours per week as claimed, unless I can explain it. That seems to me to be doing HMRC's job for them. And HMRC have already satisfied themselves previously that I qualify. Hours worked as a writer per week is understood to be laborious and time-consuming and is not reflected in a high output or income and as far as the HMRC are concerned, hours worked and money earned is no indication as to whether I satisfy their rules on being gainfully self-employed. They have to therefore be satisfied that the work I do is 'remunerative' - which it is. I have been paid on commission... I will be paid on delivery. I am under contract. Therefore, I am working with a view to making a profit.
Why is that the housing benefit authority's concern? I just don't really get it.
I understand if they wonder how you can afford to live on so little income and suspect undeclared income - but they have all my bank statements and see all money coming in and going out, including utility bills and food bills. And, they haven't asked me at all how I afford my bills and outgoings. They are just asking me if I actually worked 16 hours a week and if I didn't, have I told HMRC Tax Credits?0 -
Although Housing Benefit and Council Tax Reduction claims are both dealt with by the council they are, in fact two different benefits and have different 'rules' (forgive me if you are aware of this)
You say that you are getting the Severe Disability premium with your council tax claim. Are you sure of this?
Each council can have their own rules for claiming a council tax reduction for working age claimants. Are you paying any council tax at all? look at your award letters and please tell us how your award for council tax reduction has been worked out.
I do not know any councils who award a severe disability premium for council tax reduction but this is common for the housing benefit claim.
If you are paying no council tax then I suspect they have made an exemption for another reason.
Which council do you live in?0 -
As Pmlindyloo says, they are two separate things with different rules that are assessed differently.
I don't know why they would ask questions like this for HB, unless think there is undeclared income. But it isn't part of the test for HB specifically.
IQ0 -
That's not correct. The SDP is not added to council tax reduction, it's part of housing benefit.Hi Icequeen99,
Yes it is definitely a review of my self employed earnings as part of my housing benefit & council tax reduction claim. I wondered if my local council applies the minimum income floor with regard to council tax reduction but because I am entitled to the severe disability premium as part of my applicable amount, I am exempt from making any contribution to council tax if I qualify for full council tax reduction because my weekly earnings are less than the applicable amount.
Most people are required to pay some council tax now. I claim SDP in with my housing benefit but i have to pay £12 per month council tax.0 -
pmlindyloo wrote: »Although Housing Benefit and Council Tax Reduction claims are both dealt with by the council they are, in fact two different benefits and have different 'rules' (forgive me if you are aware of this)
You say that you are getting the Severe Disability premium with your council tax claim. Are you sure of this?
Each council can have their own rules for claiming a council tax reduction for working age claimants. Are you paying any council tax at all? look at your award letters and please tell us how your award for council tax reduction has been worked out.
I do not know any councils who award a severe disability premium for council tax reduction but this is common for the housing benefit claim.
If you are paying no council tax then I suspect they have made an exemption for another reason.
Which council do you live in?
Hi pmlindyloo,
I have had a close look at my borough council tax reduction scheme and I would rather not say where it is I live for reasons of anonymity but it appears I am in a class of 'protected persons' who does not have to make a minimum 30% contribution towards council tax as a working age claimant:
"..Under the 2019/2020 CTR scheme working age households will be required to make a minimum contribution of 30% towards their council tax liability.
The following households will be protected from the minimum contribution:
• Households that receive a Disability Premium within their CTR claim (for either claimant, partner or dependent child)!
• Households that receive a Carer’s Premium within their CTR claim (claimant or partner)!
• Households where the claimant or partner are within the ‘Support Group’ for Employment Support Allowance!
• Households receiving a Disability Banding Reduction from council tax!
• Households receiving either War Disablement Pension or War Widows Pension (either claimant or partner)!
• Households containing a dependent child aged under 3 years old..."
The way it is administered by my borough, my housing benefit and council tax reduction is dealt with together and I receive the disability premium because I receive PIP.
Hope that helps.
Nowhere within the copiously long document describing the scheme, especially under the section on self-employed earnings is there any mention of the minimum income floor being applied.0
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