Self employment and LCWRA

Sheepgobah

Hi 

Sheepgobah

My other post didn't have everything I'd written in it... So trying again!

I have been on LCWRA for just about a year and contribution based Esa for about the same time. 

I've been out of work for 2 years, due to my health condition (systemic lupus erythematosus if it matters). 

I would really like to go into self employment, as I would like an opportunity to work again and make my situation better in the future. 

I understand the under 16 hours rule for ESA and the work allowance for universal credit. 

I really don't know how any of this works regarding the lcwra and if even enquiring about self employment with universal credit is taking a risk. 

And I'm actually quite frightened of reaching out to them, as the idea is that I want my situation to improve not get worse. 

I'd be looking at work I can do from home (as I can't really leave anyway due to mobility issues). 

If anyone has any experience being on these benefits and being self employed, I would really appreciate any advice or even if you would feel comfortable sharing your experience. 

I'm just tired of feeling like I'm rotting away in my house. 

Thank you in advance! ❤️

Hannah_Alumni

Hello @Sheepgobah

Welcome to the community! Just to let you know, I merged all your posts and tidied them up a little. 

Scope's page on Self Employment and Benefits will be useful to read. What kind of business / service are you looking to do whilst self employed? 

jhorner

Hi Sheepgobah
I don’t know the answers, but just posted similar questions so wanted to express empathy! 

You might have discovered answers to some of my questions too? 

Sheepgobah

jhorner said:

Hi Sheepgobah
I don’t know the answers, but just posted similar questions so wanted to express empathy! 

You might have discovered answers to some of my questions too? 

I haven't discovered much in terms of the benefits side of things. 

Apparently though we have A £1000 tax free allowance per tax year (can't claim expenses on that though). 

And from what I can gather we do need to make universal credit aware of anything we earn but it's not necessarily classed as earnings, which personally I think is good for those of us who are just starting out and testing the waters.

I wish I'd found more on the lcwra front but unfortunately I'm drawing a blank. 

I think i may have to bite the bullet and ask an advisor which I was hoping to avoid tbh, nothing against them just don't have the best experience dealing with anyone working with universal credit x

jhorner

I’m not on universal credit and haven’t had any contact with UC staff. Would I need to transfer to that from contributions based ESA for income to not be important?

I noticed yesterday that the lower threshold for Permitted Work on ESA is £20/week so I’m taking that to mean they don’t want to know about earnings until they average over that? I’d seen the £1000 tax thing too, that applies to everyone, but I think it’s separate from what’s ok benefits wise?

In the past I’d heard about a trading scheme thing to aid the transition into starting a business from disability benefits but I don’t think that’s currently happening? We definitely need something like that, to test out ideas without benefit penalty.

poppy123456

jhorner said:

I’m not on universal credit and haven’t had any contact with UC staff. Would I need to transfer to that from contributions based ESA for income to not be important?

No you don't. UC and contributions based ESA are completely different benefits.

jhorner said:

I noticed yesterday that the lower threshold for Permitted Work on ESA is £20/week so I’m taking that to mean they don’t want to know about earnings until they average over that?

That's not correct. The lower earnings limit applies to a partner of an Income Related ESA claim, it doesn't apply to the main claimant. So for you it's irrelevant. The permitted work rules apply with an earnings disregard of £167/week. As i advised, when you start working, regardless of how little you earn you need to report it to ESA.

jhorner said:

In the past I’d heard about a trading scheme thing to aid the transition into starting a business from disability benefits but I don’t think that’s currently happening? We definitely need something like that, to test out ideas without benefit penalty.

There is something like that, it's permitted work.

poppy123456

Sheepgobah said:

jhorner said:

Hi Sheepgobah
I don’t know the answers, but just posted similar questions so wanted to express empathy! 

You might have discovered answers to some of my questions too? 

And from what I can gather we do need to make universal credit aware of anything we earn but it's not necessarily classed as earnings, which personally I think is good for those of us who are just starting out and testing the waters.

I wish I'd found more on the lcwra front but unfortunately I'm drawing a blank. 

I think i may have to bite the bullet and ask an advisor which I was hoping to avoid tbh, nothing against them just don't have the best experience dealing with anyone working with universal credit x

That's not exactly correct. Any money you received from paid work is classed as earnings. You will have the work allowance, which means you can receive a certain amount of earnings each month before the 55% deductions apply.

If you claim for help with the rent your work allowance will be £379/month, if you don't then it will be £631/month. https://www.gov.uk/government/publications/universal-credit-work-allowances/universal-credit-work-allowances

If you're self employed you will need to report your earnings and expenses on the last day of your assessment period, if you don't then you won't receive any UC payment.

If you're claiming New style ESA as well as UC then the permitted work rules apply. For this it's a maxium earnings of £167/week. https://www.entitledto.co.uk/help/permitted-work-rules

I wouldn't advise you to contact anyone from UC for any advice because they're not benefits advisors and their advice shouldn't be relied on.

jhorner

There is something like that, it's permitted work.

No there was a specific scheme aimed at helping people set up new businesses, permitted work isn’t similar to what I’m thinking of. 

jhorner

That's not correct. The lower earnings limit applies to a partner of an Income Related ESA claim, it doesn't apply to the main claimant. So for you it's irrelevant. The permitted work rules apply with an earnings disregard of £167/week. As i advised, when you start working, regardless of how little you earn you need to report it to ESA.

Are you sure? I got the information from Citizens Advice. 

poppy123456

jhorner said:

That's not correct. The lower earnings limit applies to a partner of an Income Related ESA claim, it doesn't apply to the main claimant. So for you it's irrelevant. The permitted work rules apply with an earnings disregard of £167/week. As i advised, when you start working, regardless of how little you earn you need to report it to ESA.

Are you sure? I got the information from Citizens Advice. 

100% positive! I wouldn’t give incorrect advice. There’s no lower earnings limit for main claimants of ESA. 

It would make no sense to have a lower earnings limit when the higher limit is £167. 

Sheepgobah

Hi Poppy,

Thanks for the advice. 

I'm still not certain what to do. 

I'd love to just try but the way everything is set up seems to be really complicated and it really puts me off trying. 

Sameecharity

You can always explore the option for self-employment.  There is no reason why you cannot research your idea, find out if anyone is interested and start to prepare a business plan.  That is not actually trading, it is seeing if there is a viable market and whether anyone would buy from you.  I work for a charity who are specialists in self-employment support for disabled people and the UC and ESA work coaches often refer people to us in your situation.  Unfortunately, New Enterprise allowance scheme finished in January so there is currently no specific offer although you can get referred onto a more general work and health programme once you are more ready.  I would explore the option and see whether there is a market first then worry about benefits … dont forget you can also claim access to work once your are trading to support you with a personal assistant/driver/equipment etc, so it is not all bad.

L_Volunteer

Would you like to talk about your current thoughts around what to do @Sheepgobah? We are here for you if you would like to navigate it with our support 

jhorner

Sameecharity said:

You can always explore the option for self-employment.  There is no reason why you cannot research your idea, find out if anyone is interested and start to prepare a business plan.  That is not actually trading, it is seeing if there is a viable market and whether anyone would buy from you.  I work for a charity who are specialists in self-employment support for disabled people and the UC and ESA work coaches often refer people to us in your situation.  Unfortunately, New Enterprise allowance scheme finished in January so there is currently no specific offer although you can get referred onto a more general work and health programme once you are more ready.  I would explore the option and see whether there is a market first then worry about benefits … dont forget you can also claim access to work once your are trading to support you with a personal assistant/driver/equipment etc, so it is not all bad.

Are you allowed to say which charity you work for? I’m struggling to get specific enough advice with fluctuating ability to work and unrelated unpredictable income. 

I’m wondering if there might be legal workarounds to stabilise income? For example, can I set up a company and then pay myself a steady wage under £167 (once I start earning that) as an employee of the company, with any excess income to the company being invested in growing the company (production costs and advertising) rather than my income? Realistically I’m expecting it would be a long time before genuine profit/wage would exceed that regularly and at that point I’d be less anxious about losing ESA. 

This isn’t a dodgy suggestion, as I’m almost sure I’d still struggle to get enough money for advertising and production costs, it would just more clearly separate the business from my income. I’d be literally employing myself. The AI version of Bing says it might be possible if I setup a limited company and then employ myself as the sole director. The ESA implications are unclear though.

samart4u

hi sheepgobha
i am on LCWRA ,I AM DOING PART TIME EMPLOYED WORK 15 HOURS A WEEK I DO EARN £600 GOING DIRECT DEBIT IN TO MY ACCOUNT A MONTH.
 IT  DID NOT EFFECT MY BENEFIT BUT DID EFFECT MY HOUSING TAX ONLY ,ITS GO UP AND I AM PAYING £110 A MONTH COUNCIL TAX.
 STILL GET MY UNIVERSAL CREDIT ,HOUSING BENEFIT AND MY LAWRA WICH IS ALL TOGETHER AROUND  £1226 A MONTH .

THEY UNDERSTAND PEOPLE HAD A  PERMEANT MENTAL OR PHYSICAL ILLESS ,  NEED TO DO AS PART OF TREATMENT AND SOME EXTRA MONEY HELP YOU WITH RELIEF THE STRESS OF LIVING COSTS .

NOTE;

YOU MUST TO FILL WP1 FORM (FILL IT ON LINE AND SAVE IT AS PDF OR PRINT IT OUT) BEFORE  YOU START ANY JOB AND SEND IT TO YOUR COACH IN YOUR JOB CENTRE .

OTHER WIZE WILL EFFECT YOUR BENEFIT,
ALL YOU NEED FILL IN 2 PAGES, IT IS A SIMPLE QUESTIONS FORM ; WORK PLACE,HOW MANY HOURS ,WHAT BENEFIT YOU TAKE AND HOW MUCH EARNING.
 YOU ARE ALLOWED TO WORK LESS THAN 16 HRS AND EARN NO MORE THAN £167 A WEEK .
DO THIS AND YOU WILL BE FINE.
GOOD LUCK