ATBU? gig economy/benefits related

[Neome]

This is not me and none of my business really except that now and again I've helped some friends and family members with disabilities with form filling and benefit claims wherever possible helping to find a trained advisor

MN advice massively appreciated.

Friend F was made redundant and has been job hunting for a while, claiming JSA and housing benefit. F is somewhat disadvantaged by disability. F has seen a gig economy type job where they would be paid cash. By coincidence F discovered that their neighbour N is also doing this. The activity itself is as normal and legal as driving Uber or doing Deliveroo ie one where it saves money for the business not to 'employ' but subcontract work - I'm not sure that's the correct terminology.

As I understand it N claims Working Tax Credit. I estimate F might take home about £150pw cash for around 30 hours work. If F declares this as self employed income and claims WTC instead of JSA they might be no worse off financially but at least not be signing on.

Obviously the business is BU if not downright illegal but would F and N be in any way responsible if they are honestly declaring their income and paying NI etc?

N is already doing this but F has not started just finding out about it and a bit shocked by the low hourly rate.

Please help if you can

To get tax credits you have to work a set number of hours based on adults in household,children or disability. You have to earn mim wage or you are presumed to earn mim wage (regardless if you do or not) it all depends on circumstance. Especially if you are self employed, gone are days of buying and selling on eBay and declaring £2 and hour and getting benefits to top it up.

He may get away with saying he does 16hours let's say because he's disabled and work longer hours To make up the money. But if it's not that bad and they say they expect him to work 30hxmim wage that could mean working 12-15h days.

Either way he's breaking the law claiming jsa and presably other things like housing benefit and council so he needs to stop and then find out and start again, or give them full facts now.

There are loads of benefit calculators he can play on to give him an idea.

I think self-employed are assumed to earn minimum wage for the hours they work for tax credits/UC purposes.

Thank you so much for replying.

Just to check I understand you do you mean if F was able to earn eg £150pw then they should only claim to be working the number of hours that would be at minimum wage? Or do you mean if F declares the actual number of hours they will be assumed to be earning h x min wage?

It's not something where they can do extra hours to earn more and F would struggle to do more than 30 I think.

I don't think F is breaking the law by looking into this as a work option, as far as I know they want to find out if it's legal to do and declare it.

Could F ring the tax credits helpline and ask them? Also the local council to see if they would still be entitled to any HB/Ctax relief?
Also maybe look at other benefits to top up income such as PIP if disabled?

Entitledto is a good website to start with. It also allows you to hypothetically work out what could be available if you get a job/ change hours/ change salary etc.

Thank you Rose, really helpful. Friend currently gets DLA but no guarantee will get PIP when reassessed of course.

www.entitledto.co.uk/benefits-calculator/startcalc.aspx
This is one of the better benefit calculators :) Hope it helps

Thank you, that is really helpful I'll show them the calculator tomorrow.