Housing Benefit review & self employed low earnings

Icequeen99 wrote: »

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.

IQ

Hi Icequeen99,

See above in my reply to Pmlindyloo how my borough administers council tax reduction.

I agree with you. I don't know why my council is asking questions about my working hours and proving it as well as how I intend to increase my income because it is not part of any means test to qualify for HB specifically.

If they were after undeclared income then wouldn't they specifically be asking me how I manage to pay my bills? They haven't. And, they have all my bank statements to see that for themselves in any event.

I find it all so odd. I have a similar benefit income to what I received when I was on a passported benefit - ESA - when I originally applied for housing benefit and council tax reduction all those years ago. I got DLA then too, until I was transferred onto PIP. Although, I got extra with SDP as part of my ESA which I no longer get.

I will have to answer their questions the same way I would as if this were an HMRC tax credits compliance enquiry because I don't want to !!!! them off... even though it has nothing to do with my eligibility for housing benefit.

pmlindyloo wrote: »

I will respect your desire to not name your council but by the magic of google have actually found a council that does indeed give an exemption when a severe disability premium has been applied. (In fact there may be more than one!)

Well, you live and learn!

I still find it hard to believe (having dealt with many cases myself) and a part of me wonders if they are just using the SDP in the housing benefit claim (which you should have been awarded) and put it in the council tax claim! (hope that makes sense)

In any case to go back to the original questions they are asking....

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.

In the light of how your council now works out your council tax reduction your earnings should, indeed, make no difference.

So, working on your original belief that this is about housing benefit I am wondering if we have got too 'technical' and, in fact, this is merely a query (albeit cunningly described) as to whether they suspect you are secretly getting money by other means! (I have seen this before)

Providing your bank statements/savings/accounts etc should reassure them. Do they know the nature of your self employment? It might be worth calling them and asking why they are asking for this information as HMRC are satisfied after their reviews of your self employment. You could also ask if there was any other information that they needed.

I assume they realise that with your PIP, WTC, HB and CTR and small wage you are managing financially as they didn't ask for a financial statement of affairs.

I may be completing on the wrong track but hopefully this should be sorted soon.

And apologies for my disbelief of how your council tax works

Thank you Pmlindyloo for looking into it and confirming it isn't really part of applying a minimum income floor to calculate my council tax reduction. No problem you querying my explanation about the disability premium in housing benefit exempting me from making a contribution to council tax because I know all councils have their own schemes. My council's current scheme is in line with how they have previously administered it and so they are deciding to carry on as before, it seems.

I don't know how helpful it would be for me to phone them up and pretty much tell them HMRC Tax Credits are satisfied with my self-employment so what business is it of theirs? I think it best to answer their questions confirming my working hours and why the low income and how my earnings are expected to increase head on. I am getting a letter from my commissioning editor to confirm I am under a writing contract and how long it has been extended for and since when and that I am due to be paid on delivery with a view to a larger commission. I am also seeking medical evidence from my surgery to support what I say about how my working hours and productivity are effected by my health condition and the effects of my medication - they are fully aware of how it effects my work and how I have to stagger my hours around it. I will also provide them with the relevant guidance from the Tax Credits Technical Manual about writers and artists. I can also send them HMRC's letters to me initiating their compliance check under the new self-employment rules as well as their letter confirming my award would continue after it was completed.

I find it an odd way of querying if I have undeclared income. They have all my bank statements, as I said. I also use credit cards to help with big bills and food items etc and they can see my repayments to credit cards are regular and high from those bank statements. What is a 'financial statement of affairs'? When you say this is a cunning way of finding out if I have money by other means, how would their questions establish that? To me, it read as them disbelieving I worked for the 16 hours needed to be eligible for my working tax credits especially given they then go on to say that if I haven't, have I told HMRC? I put that down to them not understanding the nature of my self-employment. Where in their questions is there a suspicion that I have undeclared income? When you say you've seen this before, can you explain?

Thank you for helping me get to the bottom of this.

I must say it has made me in turns annoyed with them and now paranoid!

pmlindyloo wrote: »

My saying that they are querying that you have undeclared income is only a possible explanation. Thinking about this further it now seems unlikely because you receive quite a high amount in WTC because of your disability. (the disability element) (I missed that you were entitled to this part of WTC, sorry)

I think your plan of sending more supporting documents is a good one.

They will already know that you receive WTC as this will be counted as income in their calculation of your HB so it may just be that they are querying the amount you earn in regards to the hours you work and receive WTC.

It is a bit of a strange one. My suggestion to telephone is just to give you the opportunity to find out why they are querying the WTC and earnings.

Please let us know how you get on.

Thank you for all your help and advice Pmlindyloo. It is all very reassuring.

There is something worrying me though, which may not be an issue at all but I wonder if you can help reassure me.

The hours worked that the housing benefit officer is querying is during the Tax year April 2018 - April 2019.

Between Easter at the beginning of April 2018 and August bank holiday that year (a period of 21 weeks), I was working less than the eligible 16 hours because I was very ill. I did not apply for ESA at that time because I always understood that as long as in the week immediately preceding this period I was working (as self-employed) 16 hours a week (which I was), for the purposes of my WTC eligibility, I would be treated as being in remunerative work for the first 28 weeks as long as I would also qualify for a qualifying benefit like ESA, which I would have. The WTC Technical manual makes clear that I did not actually have to receive ESA during that period. I thought I would not be required to report my illness to HMRC unless I was still sick after 28 weeks.

Quoting:

"HMRC internal manual
Tax Credits Technical Manual TCTM02421
From:HM Revenue & Customs
Published:19 March 2016
Updated:6 August 2019

Entitlement: WTC entitlement - Qualifying remunerative work: Periods of illness or incapacity for work
The Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002, Reg. 6

An employed person is treated as being in qualifying remunerative work for up to 28 weeks, provided that person normally worked at least 16, 24 or 30 hours a week (whichever applied) immediately before beginning to receive any one of these benefits:

Statutory Sick Pay
Short-term Incapacity Benefit at the lower rate
Income Support on the grounds of incapacity for work
Employment and Support Allowance
National Insurance credits on the grounds of incapacity for work or limited capability for work

A self-employed person does not have to receive one of the benefits listed above. They will be treated as engaged in qualifying remunerative work for up to 28 weeks providing that:

they were engaged in self employed qualifying remunerative work in the week immediately before the period of sickness began
they would have qualified for one of the benefits listed above if they had been employed."



At the time my PIP award (enhanced daily living) was being reviewed. There is a GP report which the DWP has from April 2018, an ATOS (IAS) Health Professional's report for the DWP from May 2018 and a statement of entitlement from the DWP PIP Decision Maker renewing my award to 2020 at the same rate from June 2018. So, there is ample evidence available in the form of my statement of entitlement of my level of illness.

I did not apply for ESA because I did not think that I had to and I also did not want to because I was always hoping I would get better and back working again. In fact, during that period I struggled on with my writing work (less than 16 hours per week) and had I applied for ESA, I might have been assessed as being in the work related activity group where I would be allowed permitted work. My borough was not a live UC area at the time so I could have applied for ESA again (including getting extra money as I qualified for the severe disability premium) and still qualified for my WTC at the same time for the first 28 weeks.

I was offered sick notes by my GP at the time but I thought I didn't need them because I didn't want to apply for ESA. HMRC Tax Credits do not ask for sick notes (fit notes) anyway. Any guidance from HMRC only says that you should report your illness by calling their 0345 300 3900 after the first 28 weeks, and within one month after that or you could incur a penalty. I was only ill for 21 weeks so I didn't report it to HMRC. I did not think I needed to. Was I wrong about that? Would that get me into trouble?

There would be no point in me calling up the council to query why they are asking questions about my working tax credits eligibility. I think it is best to get everything with supportive documentary evidence in place and in writing as they ask and send it to them. I have already had trouble phoning them to ask for a few days extension on their deadline for my response... they asked me to email in writing to request it. So, I have zero confidence that I will get any joy phoning them up querying why they are checking up on my WTC.

Am I in trouble for not reporting my illness to HMRC during those 21 weeks? Nowhere can I find that I should have reported illness to them if I am self-employed unless it was for more than 28 weeks.

Hi All,

The issue of self employed working tax credits and gaps in working because of illness is a separate issue... so I have started a new thread in case there is anyone out there who knows more about it.

But thank you all for helping me with my questions about the my self-employment being reviewed by my council. I will let you know how I get on.