Tax and permitted earnings on ESA

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Marmalade

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Tax and permitted earnings on ESA

  • on: 04 Jun 2012 03:45PM
Hello everyone. I am new to this forum so I hope I'm posting in the right place.  My daughter is an active member of this forum and has found is really valuable, and says I should ask for advice here.

I am in receipt on ESA (since October 2010) and have been put into the support group.  I also get DLA at the higher rate for mobility and the highest rate for care.

I have been doing voluntary work for a charity for over 18 months now.  I always do  less than 16 hours a week, and the charity pays me for my petrol getting to and from their premises (they are 25 miles away so without petrol costs I woulsn't be able to afford to do it).

In May 2011 the charity offered me some paid work, and after some negotiation it was agreed that they would pay me for 6 hours a week (which took me up to just under 95 a week) and I would also continue to do some voluntary work for them, making sure that my total hours (paid plus voluntry) remained under 16 hours a week.  I contacted JCP and they gave me their approval that my work was allowable under the permitted earning rules.

My initial contract with the charity ended on 31/03/2012.  Back in March, the charity offered me a 6 month extension, tking me to 30/09/2012, on the same basis as before.  My interpretation of the rules, as published on the Government's website, is that the 12 month limit on permitted earnings does NOT apply if you are in the support group.  I have had several conversations with JCP in which they have initially said that I can't work beyond 12 months, but then agreed that my interpretation is correct.  They told me to write in to get their formal approval, which I did.  They say the letter never reached them.  In my latest conversation with them they said I wasn't allowed to work beyond the 12 months, but they would send out a permitted earnings form and once I'd filled it in a returned it, it would go to a decision-maker.

So this brings me to my first question:

Am I correct that if I'm in the support group, I can continue with permitted earnings to 95 a week (or I think it may have gone up to 97.50 a week) beyond the initial 12 months?

My current permitted earnings authorisation expired mid-May.  I have in practice been unable to do any work at all, paid or voluntary, for the last 7 weeks due to a broken foot.  However, I want to go back to "work" this coming Thursday.  Clearly I can't do any paid work until this benefits situation is sorted out, but can I do voluntary work?  My daughter says I mustn't risk going in at all, even a volunteer, until this is sorted out.  This therefore brings me to my second question:

Am I allowed to do voluntary work whilst on ESA (Support Group) and do I need explicit authorisation from JCP?  My voluntary hours are always less than 16 hours a week, and there are of course many weeks when I am too ill to work at all.  I don't know whether it's relevant or not, but the charity does make all sorts of adjustments to make it possible for me to work at all (short days, dedicated disabled car parking space, all meetings held downstairs etc).


Ever since I started to get ESA, I have been told that was was on income-based ESA.  Every letter from them (and I have a goodly number of them, all of which I have kept) say that I am on income-based ESA.  When I started doing paid work for the charity, I was put on the tax code BR (basic rate) so I was being taxed for everything I was earning.  I contacted the tax office, explained that my only other income was income-based ESA and non-taxable DLA.  I had to send them proof of income-based ESA (the usual routine of sending them an original letter) and accordingly they adjusted my tax code.  I got a rebate of the tax I had paid, and no further PAYE was deducted.

I was therefore horrified to get a scrappy printout from JCP (it wasn't  on a proper form, and didn't say P60 on it) stating that I had received several thousand pounds worth of taxable ESA during the 2011/12 tax year.  I phoned them up on Friday and they said that I am on both contribution-based ESA and income-based ESA.  I was horrified.  This now means that I will be faced with a large tax bill that I haven't allowed for.  They just said it was nothing to do with them - it was all down to the tax office.  This therefore brings me to my next question...

If every letter I have ever received from JCP says I'm on income-based ESA, what on earth can I now do when they've sent me a statement showing that I've received taxable ESA?

I also have one final question: 

What counts as voluntary work?  For example, I am a moderator for my local freecycle group, and 2 or 3 times a day I spend 5 minutes moderating posts.  Is that voluntary work?  I occasionally (not very often since I'm disabled!) help with teas and coffees when I go to Quaker meetings.  Does that count as voluntary work?  I am considering trying to set up a volunteer car scheme to take elderly and disabled people to the GP and hospital - my role would, I suspect, primarily be home-based acting as coordinator since my disabilities make it too hard to be more active than that - would that count as voluntary work?

Thanks very much for reading this and for (hopefully) being able to answer some of my questions.

Best wishes

MarmaladeQ
 



 


Monic1511

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Re: Tax and permitted earnings on ESA

  • on: 04 Jun 2012 04:35PM
Hi
I don't know the permitted earnings rules under ESA although I probably should,
I just lifted this off the directgov website
About Permitted Work

Generally, you are not allowed to work while you are getting Employment and Support Allowance because of an illness or disability.

You may be able to do some types of work and within certain limits. This is called 'Permitted Work' and it allows you to test your own capacity for doing some work and perhaps gain new skills.

Although you do not need permission to do Permitted Work, you must check that the work you want to do is allowed under the Permitted Work rules. You should discuss this with your personal adviser.

You do not need approval from your doctor or have to have a medical assessment just because you are doing Permitted Work. If a medical assessment is due as part of your ongoing benefits-related review, it will go ahead as planned.

Permitted Work is a benefit arrangement - employers do not offer 'permitted work'.
The Permitted Work rules

Under the Permitted Work rules you can:

    work for less than 16 hours a week on average, with earnings up to 97.50 a week for 52 weeks
    work for less than 16 hours a week, on average, with earnings up to 97.50 a week if you are in the Support Group of the main phase of Employment and Support Allowance
    work and earn up to 20 a week, at any time, for as long as you are receiving Employment and Support Allowance
    do Supported Permitted Work and earn up to 97.50 a week for as long as you are receiving Employment and Support Allowance, provided you continue to satisfy the Supported Permitted Work criteria

Supported Permitted Work means work that is supervised by someone who is employed by a public or local council or a voluntary organisation, and whose job it is to arrange work for disabled people. This could be work done in the community or in a sheltered workshop. It also includes work as part of a hospital treatment programme.



I can answer the bit about con based ESA & income based ESA.

your con based esa is the 71/week  the top up of the support group 34.05 is income related so if you have had 52 weeks at 71 per week then your taxable income is 3692, 6 hours at min wage 36.30 *52= 1887.60
1887.60+3692= 5579.60 taxable income.

If your in the support group and capable of some work Id be more concerned that you get reassessed into the "work related activity group" - I may be over reacting as the support group are people classed as incablable of any work.

the letter highlighting that your on income based ESA is to help with housing & council tax benefits - if it says income related then the council don't tend to want proof of income savings etc & your passported onto full housing benefit & full council tax benefit.   If you only on con based ESA you have to provide bank statements and often have to contribute to your rent/council tax.

If I feel better I'll try & look up the permitted work rules in the book but only used the website just now
best wishes
Monic
« Last Edit: 04 Jun 2012 05:15PM by Monic1511 »

Sofie

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Re: Tax and permitted earnings on ESA

  • on: 04 Jun 2012 05:18PM
"What counts as voluntary work? "

I will find it later; but I'm sure there's something about it being a charity and something about you not working for family. So, you couldn't work in the family business for nothing and claim it's voluntary work. But, you can work in the local charity shop for nothing (as many do) and it be classed as voluntary work.

Marmalade

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Re: Tax and permitted earnings on ESA

  • on: 04 Jun 2012 07:10PM
Thanks.

I'm haven't up until now been too worried about being counted as being capable of work because I have had so much time off sick from my permitted work.  If anything, doing the permitted work has really brought it home to me just how ill I am.  The charity I'm working for has been really good about all my absences, but there's no way that I could hold down a normal job, even a part-time one.  I miss about one week in five because I have a crush fracture in my spine that flares up so badly that I have to take morphine, and in the last 10 weeks I have had a broken rib, and then a broken metatarsal.   The fractured metatarsal is in a place with poor blood supply and I'm expected to be in a boot for 3-6 months and if after that it doesn't mend I will need surgery.  This is on top of all my other conditions (brittle asthma, bronchiectasis, specific immune deficiency, chronic non-union of the navivular and secondary Addison's.)  I also have mental health problems that have worsened as my physical health has deteriorated.    However, now that you raise the issue I'm feeling paranoid about it!  I have loads of medical evidence, and my main consultant is adamant that if I attempted to go back to work properly I would get very ill very quickly (and by ill I mean in hospital, on oxygen & iv antibiotics).

Dealing with the benefits system is like dealing with the Stasi.  If you come to their attention in any way, they can make your life completely impossible.  I am now terrified of phoning them at all.



 

seegee

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Re: Tax and permitted earnings on ESA

  • on: 04 Jun 2012 07:49PM
The last potential voluntary role you mentioned might take up quite a lot of time & energy unless you have a team of volunteers who are willing & able to do some of the coordinating duties. 
There are a lot of people needing to get to medical appointments who don't qualify for hospital transport (or home dental/ optical services either) and can't easily afford taxis, so you may find that puts a lot of pressure on you. 
Do you have a few other people who'd be willing & able to coordinate if you are unable to do so, or are you planning to limit booking times to a couple of hours a day?  Who would do it if you are too ill or in hospital yourself?
It'd be a really useful thing to do - hospital transport isn't available to all and often involves the patient in lots of waiting, some ring&ride services aren't for people with temporary injuries and won't do things like taking someone to the dentist, taxis are expensive - but do think of how much time the service will take to work well and make sure there's a team, not just you (you need support too >biggrin<).
I'm hoping not to put you off the idea, just doesn't seem reasonable for a single person to coordinate (unless you live in a tiny village & it's only for residents).  >hugs<

Marmalade

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Re: Tax and permitted earnings on ESA

  • on: 04 Jun 2012 08:13PM
The car volunteer things would only work if I had other people acting as coordinators alongside me - I am ill far too often to do it on my own.  I was hoping to try to get the ball rolling and get other people to volunteer not just as drivers but as coordinators.  Unfortunately I am not very reliable since I frequently wake up in intense pain and spend the next 7 days away with the fairies on morphine.  I keep querying with the GPs whether I should be taking so much morphine, but they seem to think it's OK.  It so easy, though, to think of all the reasons not to do something.  I see a need, and a way of meeting it, but I certainly wouldn't attempt to do it alone.  Sometimes, though, it's possible to act as a catalyst.

seegee

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Re: Tax and permitted earnings on ESA

  • on: 04 Jun 2012 09:07PM
It'll be a great service if you get it started >thumbsup< - I hope you get enough interested & useful volunteers when you put initial feelers out.  >rose<