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Self employed income on LCWRA

baz88

Hi everyone, I'm new to scope and have a question that I'd really appreciate your help with.

I'm currently on LCWRA and self employed. Although I haven't been working since being placed in the group, I'm an artist so have continued to produce art as a hobby and wellbeing activity.

I was recently approached by a reputable gallery through social media who would like to represent me and have also been offered a lump sum amount for a selection of my pieces by one of their collectors. This is a once in a lifetime opportunity which could enable me to start financially support myself again.

I desperately want to take that leap of faith and accept this offer however I'm currently heavily reliant on UC for my housing and general living costs so can't risk compromising that.

The way my disabilities effect me varies considerably from day to day so realistically this is one of the very few ways that I could ever see myself being able to work again.

The amount I would be receiving would be £5600. If I were to accept this, how would this effect my UC eligibility/payments?

Thank you

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poppy123456

Do UC know that you’re self employed if not then you will need to report a change of circumstances and tell them.

You will need to report any earnings and expenses on your journal on the last day of your assessment period. The earnings will affect your UC in the month they are received.

You will have the work allowance which means you can earn up to £379/month before any deductions apply.

You may also be affected by surplus earnings, which means your UC future payments. This is complicated and will depend on your circumstances. More information here https://www.entitledto.co.uk/help/universal_credit_surplus_earnings

baz88

Thank you @poppy123456. Yes I was already registered as self employed when I was moved onto LCWRA so have been submitting those monthly earnings/expenses.

The surplus earnings side of things has confused me a little. In my situation, am I correct in thinking that if I accepted the £5600 then I would have surplus earnings for 2 months providing that I didn't receive anymore income in that period?

How many months in a row could I have surplus earnings before my claim were to be cancelled or would that only happen if my savings rose above £16000?

Could all of this trigger a review of my claim?

Sorry for all the questions.

poppy123456

Surplus earnings have nothing to do with savings. If you have savings of more than £16,000 there will be no entitlement to any means tested benefits.

Whether future UC payments are affected will depend on what your maximum UC entitlement is before any deductions.

baz88

I don't have savings anywhere near that so at least that won't be a problem. I suppose, what I'm trying to ask is, if I accept this £5600, could this situation close my claim? E.g I wouldn't be eligible for universal credit anymore and I would have to start a new claim and reapply for universal credit. That's what I'm really concerned about.

on this page:

https://www.understandinguniversalcredit.gov.uk/new-to-universal-credit/universal-credit-and-work/

It' states the below:

"Closing your claim because of earnings

If your earnings are high enough to receive no Universal Credit payment in a month, your Universal Credit claim will be closed."

but then says:

"If your Universal Credit payment includes an amount for housing that is paid straight to your landlord, it’s possible that you may not receive any money from Universal Credit but your landlord continues to receive money towards your rent. In these circumstances your Universal Credit claim remains open."

So is the deciding factor receiving the housing element? e.g If I stopped receiving this then my claim would be closed in this situation but because I am, I should be ok?

Sorry for all the questions but I'm so confused with this and don't feel confident posting it in my journal on UC through fear of what might happen.

poppy123456

Your UC will remain open for 6 months. If it does end then you can log into your journal and make a rapid reclaim.

baz88

That's reassuring to know, thank you Poppy.

calcotti

How long the payment affects your UC depends on what your UC entitlement is. On the first month you will get no UC. The amount that results in Nil UC is ‘used up’. The balance is carried forward. £2500 is then deducted and then the remaining balance treated as earnings for the next month. That may or not may result in a UC payment. Given the amount involved it will not impact more than two months (assuming there is no other income in those two months)

baz88

Thank you @calcotti. Just to confirm for others in the future, I appreciate that the work allowance is different but does the same apply for UC claimants with LCWRA who aren't claiming the housing element of UC or would their claim be closed, the first time UC eligibility amount reaches 0 as the previous post suggests?

poppy123456

baz88 said:

Thank you @calcotti. Just to confirm for others in the future, I appreciate that the work allowance is different but does the same apply for UC claimants with LCWRA who aren't claiming the housing element of UC or would their claim be closed, the first time UC eligibility amount reaches 0 as the previous post suggests?

The work allowance for those not claiming for help with the rent is higher than those that do. For those it will be £631/month.

A claim will remain open for 6 months, with or without the housng element after an award is reduced to zero. If it doesn't then you can make a rapid reclaim, as advised. I will advise you to keep a copy of your WCA decision just in case.

baz88

Thanks again Poppy, really appreciate your help.

calcotti

baz88 said:

Thank you @calcotti. Just to confirm for others in the future, I appreciate that the work allowance is different but does the same apply for UC claimants with LCWRA who aren't claiming the housing element of UC or would their claim be closed, the first time UC eligibility amount reaches 0 as the previous post suggests?

The UC claim was originally closed immediately UC was nil. Claimant did needed to make immediate rapid reclaim (through their UC journal). It was essential for the claimant to this that otherwise the surplus earnings would such sit there. During covid DWP started keeping claims over for six months and they appear to still being that.