I have a client on long term incapacity benefit who has been offered a job which she wanted to accept (under supported permitted work rules). Her start date would be September, working 14 hours earning £77 pw which is currently in excess of the PW earning limit. She would have to withdraw her IB and furthermore will have no childcare credits and will therefore be a lot worse off. She has been treated for anxiety/depression and this work would really be therapeutic but subsequent financial worries are likely to bring about a deterioration of her illness. She can't approach the employer to ask them to reduce the hours so she is within the earnings limit as she doesn't really want them to know about her illness. She is feeling much better and able to cope and thinks any approach to them about this would jeopardize the job offer.

I understand the earnings limit is increasing in October but does anyone know when and to how much? and if there is any way around the problems she'd have if she starts in Sept. How would it be considered if she withdrew her IB but then reclaimed in October (if the earnings rate is increased to over £77)?
Thanks
Sue

May not be an ideal solution but Reg 10 of the SS (computation of earnings) 96 regs may help. EG half of any earnings paid to occupational/personal pension scheme are disregarded when assessing a claimant's income.

The earnings limit increases to £78 on the 1st October. So possibly the need only be a temporary solution.

Thanks for that Alan

Can you please advise me under which statutory provision the new earnings limit comes into force? This is the first time I had seen any reference to the new limit going up to £78.

Ros, Don't know statutory reference. It may be that it is based on something less 'laid-down' than regs etc! However, as I understand it when the minium wage goes up it triggers an increase in the permitted earnings level. The foumula used is 16 X the mimimum wage then rounded up to the next pound. The minimum wage increases on 1/10/04 to £4.85. £4.85 X 16 = £77.60 which is then rounded up to £78.

I believe a government minisiter is then asked to OK the increase and then, hey presto, we have a new permitted earnings level.

You didn't doubt me, did you Ros?

Thanks Alan. I had no reason to doubt you! However, I only usually learn of the increase round about the date that it comes in. It's a shame they don't increase the permitted work lower limit as well. It seems to have been £20 for years with no increase in line with the NMW.

DWP's latest Touchbase magazine confirms October increased earnings limit as £78 a week.

looks like £78 .... statutory rule now out in northern ireland, see -

Earnings limits & incapacity benefits (Northern Ireland): New statutory rule

From a DWP e.mail today - Memo DMG Vol 3 13/04 - IB earnings limit inc to £78 from 1st October.
Thanks for all past responses

memo @ http://www.dwp.gov.uk/publications/dwp/dmg/memletrs/m03-13-4.asp

... and the stat instrument @ http://www.hmso.gov.uk/si/si2004/20042301.htm