Self-employed and tax credits

I think it will be very important for self-employed people to be able to remain on tax credits whilst self-isolating, shielding, or when their work has dried up.

I have the feeling that there was an announcement somewhere that self-employed workers could put themselves on furlough, and if they do then they can continue to receive tax credits.  I am assuming it is as simple as that - can’t see that much opportunity for abuse as they will be losing their earnings income.

For people who are self-isolating or shielding, then reading CPAG it says “For self-employed, you count as being in full-time paid work during any period when the above would have applied had the work done in the week before the period began been as an employee”  I can understand this - they aren’t able to access SSP.  If they have the contribution record they are entitled to New Style ESA.  Does this mean that if they are also not entitled to New Style ESA (perhaps because of contribution record) they are able to remain on tax credits so long as they have some kind of medical evidence?

Hi Ruth

Don’t know if this is helpful or not but here’s my take on your question:

I haven’t seen an announcement (yet) allowing self-employed workers on furlough to be treated as in full-time paid work.

However, in another thread a screenshot was posted of a message in a tax credits app advising claimants not to report a reduction in hours if due to coronavirus, i assume this applies to the self-employed as well.

https://www.rightsnet.org.uk/forums/viewthread/15801/

In general, you can be treated as being in full-time paid work for a period of ill health for up to 28 weeks when you are getting SSP, New-style ESA or NI Credits.

- As you say self-emloyed people who are self-isolating or shielding can’t get SSP, but they can get New-style ESA, because they are treated as LCW if self-isolating on government advice.
- If they can’t get New-style ESA because they don’t meet the contribution conditions, they can can get Class 1 National Insurance Credits. (It says this in section 8B(2)(a)(iv) of the Social Security Credits Regulations 1975).

The Gov.Uk website directs people to their local jobcentre to claim Class 1 Credits (https://www.gov.uk/national-insurance-credits/eligibility).
I’m not sure what happens if you ask the Jobcentre to process such a claim. I’m not sure if it’s the same thing as a ‘credits only’ claim for New-style ESA?

Liam

Yes, I don’t know how you would make a “credits only” claim for NS ESA - possibly you would get a reply saying you aren’t entitled to be paid ESA but can have the credits?  Or would you just be directed to UC?

Last year a client of mine made a claim for New-style ESA the normal way and got a decision letter saying they were making a credits only award as she didn’t have enough contributions. So come to think of it, I reckon this would be the way to do it.

Liam