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UC WCA refusal and self-employment
Hello
Apologies for my ignorance but rarely deal with self-employed claimants. This is a long read!
The scenario from what I understand is as follows which is based on a complaint response from the DWP to a letter an adviser wrote who is now seeking further advice.
The claimant submitted a claim for UC on 15/01/2020 declaring that their health impacted on their ability to work. UC told the claimant that they needed to provide a fit note which they did and have continued to provide fit notes from 01/07/2019 to date.
A referral for a WCA was closed (see below) as he “started working and his income was higher than the threshold therefore the process will start when his income is lower than the threshold, however, once a decision is made a referral to a decision maker to consider backdating if he is awarded the extra element”.
This is what the DWP have advised:
1) Health journey (WCA):
20/01/2020 – consider day 1 referral, pushed to consider day 29. He did not qualify for day 1 referral
12/02/2020 – consider day 29 referral completed and WCA referral done. This referral was closed, the notes state the claimant returned to work.
22/04/2022 – WCA referral completed, this is still open and active.
2) WCA issues:
The WCA referral was closed correctly, the claimant stated to receive income from May 2020 even though some of the income may have been a loss it is still classed as income and him working.
3) Self-employment issues:
Claimant declared he was self-employed, on the 16/01/2020 he sent a journal message (JM) to state that he is long term sick and is not self-employed. He claims he was told to report himself as self-employed because he was subletting. The case manager (CM) removed the self-employment from the claim because of the claimants JM.
On the 27/01/20 claimant wrote a JM to state he occasionally receives money from selling shoes and stated that it is not a viable business due to his health and would like the profits to be taken into account rather than the turnover.
01/06/2021 claimant asked if he needed to report a business asset and his work coach discussed this, it was referred to a decision maker and on the 21/09 after missed calls and journal messages being sent a decision was made not to use the business asset as capital.
Claimant started working and his income was higher than the threshold therefore the process will start when his income is lower than the threshold, however, once a decision is made a referral to a decision maker to consider backdating if he is awarded the extra element.
So I am confused as to why the WCA referral was closed as he had fit notes and did some work selling shoes. Also does it make a difference whether someone is gainfully self-employed and how this works with the WCA process?
The claimant is mentally unwell and on better days he designs and sells his shoes so his income can vary from nil to £1995 (rare). He just wants to make sense of what’s been happening with his UC and how he can manage his claim. There is a complex needs recorded on his file and his mental health worker made the complaint to the DWP and Maximus (3 WCA appts cancelled, UC50 lost etc) as the whole “journey” has had a detrimental effect.
Any advice would be much appreciated.
You can’t have a WCA undertaken if your earnings exceed the relevant threshold - being 16hrs/wk NMW averaged to a monthly figure. So, typically, if you are below that limit when you request the WCA (‘starting the journey’ as it were) but you exceed that limit at some point along the journey but before the actual WCA is conducted, then the whole thing will be cancelled.
It sounds like in your case, his earnings have sometimes exceeded the limit with the result of causing the WCA process to collapse. He will need to either keep his earnings below the threshold for long enough for the WCA to be completed or get a PIP award (which would exempt him from the rule).
I don’t think that self-employment specifically is really the issue here. It sounds like the MIF is not being applied to him, so it is just a case of calculating his actual self-employed income. This isn’t always altogether straightforward, but broadly its a case of working out what his profit has been for the period.
There is quite a confusing sentence:
The WCA referral was closed correctly, the claimant stated to receive income from May 2020 even though some of the income may have been a loss it is still classed as income and him working.
That does not entirely make sense as it is written. If your client was ‘working’ but made a loss, then clearly he didn’t exceed the relevant threshold, so the WCA ought to have continued. Whether your client is ‘working’ or not is broadly irrelevant for UC purposes - its all about what income he is generating.
You can’t have a WCA undertaken if your earnings exceed the relevant threshold - being 16hrs/wk NMW averaged to a monthly figure. So, typically, if you are below that limit when you request the WCA (‘starting the journey’ as it were) but you exceed that limit at some point along the journey but before the actual WCA is conducted, then the whole thing will be cancelled..
Which is more of a risk when the waiting time for the WCA becomes extended as has been the case for the last couple of years.
Hi, I should have mentioned that my client receives PIP so he should have been assessed for a WCA and this journey not closed on day 29 or whatever the date the DWP said.
I’m trying to get my head around what would be the least stressful for the client - if he’s not treated as gainfully self employed then his earnings would be treated using MIF unless it’s within the 12 month start up period BUT if he was accepted as being gainfully self employed he could be pressured to increase his hours…it’s knowing which would be the least detrimental to his menttal health if at all possible…he has said that he wouldn’t do any more work if UC were going to make things impossible for him.
Does anyone have any views on this?
Many thanks
The DWP response doesn’t make any sense if he was on PIP when his previous WCA was cancelled.
On the MIF stuff, I am assuming that the DWP are not treating this as gainful self-employment as otherwise he would already have been MIFfed. There is nothing to gain from second guessing that. He could say that the work has now become GSE. If the DWP accept that, then it gives him a year without conditionality although if he doesn’t either have an LCW assessment or give up the work by the end of that period, he will have the MIF applied.
I think perhaps the bigger issue is getting his WCA done.
For claimants with health conditions the MIF doesn’t have to be the standard 35 * NMWage. The Work Coach can reduce the expected hours of work and hence the multiple used in the MIF thus reducing the £amount applied.
I’ve always wondered about the operation of reg 41(2) in these situations:
(2) If the claimant has [F1monthly] earnings that are equal to or exceed the relevant threshold, the Secretary of State may not carry out an assessment under this Part unless—
(a)the claimant is entitled to attendance allowance, disability living allowance[F2, child disability payment][F3, adult disability payment] or personal independence payment; or
(b)the assessment is for the purposes of reviewing a previous determination that a claimant has limited capability for work or for work and work-related activity that was made on the basis of an assessment under this Part or under Part 4 or 5 of the ESA Regulations,
and, in a case where no assessment may be carried out by virtue of this paragraph, the claimant is to be treated as not having limited capability for work unless they are treated as having limited capability for work or for work and work-related activity by virtue of regulation 39(6) or 40(5)
Can you argue that “substantial risk” cases nullify the earnings threshold and enable a WCA to take place? Surely there’s tension between the preemptive nature of the last para of 41(2) with reg 40(6) where substantial risk under reg 40(5) can only apply once an assessment’s been conducted
(6) Where the circumstances set out in paragraph 4 of Schedule 9 apply, a claimant may only be treated as having limited capability for work and work-related activity if the claimant does not have limited capability for work and work-related activity as determined in accordance with an assessment under this Part
[ Edited: 8 Jun 2022 at 03:19 pm by Dan Manville ]
A development!
This client’s mental health worker submitted a pre-action JR for the WCA journey being closed due to his work. The response from the DWP this morning states was brief stating that he had a WCA booked in December 2021 but rang to tell them that he was working so it was closed. The client receives PIP and has some self-employed income which he reports every month.
We had hoped the pre-action letter would rectify the issue but it hasn’t.
What can we do?
The implication of the pre-action letter is that you would now commence a claim for judicial review. However as you would be challenging the ‘cancellation’ of the WCA in December 2021, the claim would be hopelessly out of time.
I think the DWP were in error in that their officer appears to have taken the fact that your client was ‘in work’ as meaning that the WCA was unnecessary when the true position was more complicated than that. However, I don’t see that any remedy follows from this error outside of nominal compensation under a complaints process. Isn’t it just a case of requesting that your client be re-referred for a WCA as normal (if that has not already been done) and then a successful outcome ought to be backdated to when the health condition was declared?
Thanks Elliot, the client and his mental health worker have both separately made complaints with no compensation so they’re at stage 2.
The client has a new WCA journey so is waiting on an assessment; we will challenge the start date if the DWP fails to backdate.