The DEA is talking nonsense;
The relevant regulation (Reg 17(1)(b) Incapacity for Work (General) Regs 1995) refers only to "voluntary" work as an exempt category. That is, it's the nature of the work that is relevant, not the nature of the organisation you are working for.....
Other exempt categories;
1) - as part of a treatment programme whilst in hospital or attending hospital regularly as an outpatient. Can earn up to £78 p/w
2) - as long as you earn less than £20 p/w (beware of the DWP kicking off if you work more than five hours a week - ie 'cos of the minimum wage.
Both of the above can be done for an unlimited period.
3) - Permitted Work Higher Limit - work up to 16 hours a week and earn up to £78 p/w. Lasts for 26 weeks. Can be extended for a further 26 weeks but the DWP will want evidence of the work improving the claimant's chances of finding permanent work. This could be from the DEA or a personal advisor - or even the claimant.
4) - Supported Permitted Work - same rules about hours and earnings per week, but no time limit. Work must be supported - which means supervised by a public body, local authority department or a charity whose role is specificlly helping disabled people to find work.
Sounds to me like the claimants you mention might fall into the latter category, though you don't mention if they are paid. Watch out for the 16 hours rule with permitted work - though I'm certain this doesn't apply to actual voluntary work.
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