Housing costs and work allowance

Hi

I am working with a leaseholder who is claiming UC.  He gets help towards his mortgage via a DWP loan and also help through housing costs with his service charge.
He has LCW, but has just started some self-employment.  He has been told by his work coach and claim manager that his work allowance is £503, but I think that as he is getting help with the service charge it should be £287.
They have failed to pay both the loan and the service charge repeatedly, first for four months at the beginning of the year then they paid him the arrears and then they failed to pay for another four months. They have now paid the loan but not the service charge, though they don’t dispute that he is due it.
I suspect the fact that they have left the service charge off in error is the reason they are giving him the higher work allowance, but my main concern is that he will be overpaid due to their mistake.
Am I right?  His service charge is only about £ pcm but I can’t see anything that suggests that if the housing costs are low it makes a difference,
Which leads to my next question…if the £7pcm service charge does mean the lower work allowance, is there any way that he could just not claim it so he is entitled to the higher WA?
Thanks

The situation does not arise, because the moment your client brings in any earned income, the loan terminates (reg 9(3)(e) LMI Regs) and so does the help with the service charge (Sch 5, para 4 UC Regs).

So at that point, he will no longer get any help with housing costs at all, but will at least get the higher work allowance. So it may be that he is better off not working.

It supports strivers, who are not content living a life on welfare. We know that work is the best route out of poverty.