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Forum Home  →  Discussion  →  COVID-19: Employment schemes  →  Thread

SEISS and ESA new style

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Macmillan Benefits Adviser Harrogate
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I have several self employed patients, some are sadly DS1500 and others have a cancer diagnosis but on a curative pathway. UC is not an option due to savings or income from a partner. They have to self isolate for 12 weeks but in theory could do some work so could argue they are still “open for business” had it not been for COVID-19.

I would normally claim ESA new style (some would still do work up to £140 permitted work level) but if these patients claim ESA and are then invited to claim under the SEISS, might they be turned down for this scheme in case HMRC could argue that they were not fit to do work/trade anyway as a self employed person due to having ESA in payment.

I am not sure what advice to give as some of these patients would clearly receive far more under the SEISS than what they could get from ESA.

I am hoping they could get both. Any thoughts would be appreciated. Thanks.

LITRG
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Certainly one of the requirements of the SEISS scheme is that you must intend to continue to trade in the tax year 2020-21. No guidance about what that means or what evidence (if any) they will require.

Victoria

Ianb
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Claimant has currently ceased work due to need to shield as advised by government.
Claimant is entitled to claim no-ESA while shielding.
As soon as government remove advice to shield claimant intends to resume work.

The SEISS scheme guidance refers to an intention to resume trading.

Claimant therefore appears to meet the requirements.

It is almost inevitable that some claimants of SEISS are unable to or decide not to resume trading despite their intentions at the time they claim SEISS. The reasons could be various
  Health issues
  Business is no longer viable
  Maybe just found a paid job in the meantime and decided it is preferable
Presumably they will have to be cut some slack.

At the moment of course we simply don’t know what the SEISS claim process will ask and we don’t know what checks may be carried out later. On the face of it provided there is a reason/explanation for why trading did not resume despite intentions that ought to be accepted.

Ruth Knox
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That seems sensible to me - after all a self-employed person could be claiming NS ESA for a non-virus related illness or accident - the fact of claiming would not indicate that they do not intend to resume trading.

Gareth Morgan
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Basing entitlement on intention is always going to cause problems, but be difficult to challenge.  There doesn’t seem to be any element of feasibility associated with intent.

SarahBatty
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My head is spinning a bit with all the interactions

Is the SEISS earnings?  So that for NS-ESA it would have to be under the permitted earnings limit, but people do not yet know what their entitlement to it will be?

Advising a client undergoing chemo whose treatment has coincided with being unable to work and having no income due to Covid.

Dan Manville
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SarahBatty - 24 April 2020 03:44 PM

My head is spinning a bit with all the interactions

Is the SEISS earnings?  So that for NS-ESA it would have to be under the permitted earnings limit, but people do not yet know what their entitlement to it will be?

Advising a client undergoing chemo whose treatment has coincided with being unable to work and having no income due to Covid.

Calculation of earnings of self-employed earners

77.—(1) Where a claimant’s income consists of earnings from employment as a self-employed earner, the weekly amount of the claimant’s earnings is to be determined by reference to the claimant’s average weekly earnings from that employment—

(a)over a period of one year; or
(b)where the claimant has recently become engaged in that employment or there has been a change which is likely to affect the normal pattern of business, over such other period as may, in any particular case, enable the weekly amount of the claimant’s earnings to be determined more accurately.

 

There’s a lot of wiggle room in how they might calculate it as well. Hopefully they’d be happy to accept the rate of SEISS of the average earnings over the previous 12 months; whichever is lower.

Ianb
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Dan Manville - 24 April 2020 04:18 PM

There’s a lot of wiggle room in how they might calculate it as well. Hopefully they’d be happy to accept the rate of SEISS of the average earnings over the previous 12 months; whichever is lower.

I’m having trouble getting my head around the possible impact of SEISS on new style ESA too.

Claimant stops work due to having to shield because extremely vulnerable or because undergoing cancer treatment. Claims new style ESA which is put into payment.

If the reason for stopping work is shielding then the business interruption is due to coronavirus and they appear to be eligible for SEISS. Nominally the SEISS Payment is for the months of March, April and May a period of 13 weeks. If the SEISS is allocated to this period for ESA purposes it follows that anyone who gets a grant of more than £1840 is going to go over the permitted work limit and potentially have to pay back the ESA they have received for this period. The lack of any guidance on this makes it impossible to know what to advise.

In the case of having stopped work due to cancer treatment I think they are not eligible for SEISS because the cessation of work is not as a result of coronavirus..

Anybody else have any thoughts on this?

[ Edited: 3 May 2020 at 12:10 pm by Ianb ]
Ianb
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Ruth Knox - 23 April 2020 12:04 PM

That seems sensible to me - after all a self-employed person could be claiming NS ESA for a non-virus related illness or accident - the fact of claiming would not indicate that they do not intend to resume trading.

I think in such a case, if the illness or accident prevents them working, they cannot claim SEISS because one of the conditions of eligibility is that the suspension or reduction of business is due to a coronavirus related reason.

Gareth Morgan
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The SEISS guidance just says

You will need to report the grant:

on your Self Assessment tax return
as self-employed income for any Universal Credit claims
as self-employed income and that you’re working 16 hours a week for any tax credits claims

Ianb
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Gareth Morgan - 04 May 2020 11:49 AM

The SEISS guidance just says

You will need to report the grant:

on your Self Assessment tax return
as self-employed income for any Universal Credit claims
as self-employed income and that you’re working 16 hours a week for any tax credits claims

No help there in respect of ns-ESA! No way of knowing if this is a deliberate omission or an accidental omission.

Tom Messere
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There is a common urban myth that claiming any benefit disqualifies from SEISS. I have even seen this repeated in the Guardian :-). It does NOT, for you need not to have starved before you apply for the SEISS.

On top of this many self-employed folk labour under another urban myth, namely that the self-employed cannot apply for benefits, whereas it is only JSA and statutory payments from an employer that are off the menu.

Yes, we have been having much discussion re ESA amongst advisers at Maggie’s

The relationship of benefits and SEIISS is more that reverse one of what will receipt of SEISS do to benefits, when it arrives as 3 months arrears (and if extended month by moth/adapted in line with the Job Retention Scheme)

a) for UC this will be earnings in the Monthly Assessment Period in which it is received - generating much potential knock-offs from UC, possible rapid reclaims and in some cases an adviser’s first encounter with the surplus earnings rule.

b) for HB,  guidance has been issued that this will be earnings,  but to be looked out with a view to the impact on the 12 month average. So,  if business income has been hard hit then there may be no effect from SEISS replacing normal earnings.

c) for ESA it is less clear. The definition of earnings is different for non-means tested benefits, even though once counted the treatment is largely the same. So it may be, either:
i) it is not counted as earnings at all, but a grant in lieu of earnings, so to be ignored; or
ii) it is to be counted, but in the same averaging as HB over 12 months may apply.

I suspect DWP may not want the hassle/bad press of ESA overpayment recovery?

Incidentally,  a great relief that to clear the phone lines, you can now claim ESA:
  - separately online (if not claiming alongside UC);  or
  -  via an entry on UC journal if claiming with UC. 
See the latest current version at https://www.gov.uk/employment-support-allowance/how-to-claim

Saves hanging on phone and patiently re-training call handlers re ESA as a separate benefit, which has been our biggest bugbear as with Macmillan colleagues :-)  But yes, it is still worth claiming Ns-ESA even if you are claiming UC , but will save that for another post :-)

[ Edited: 12 May 2020 at 12:34 pm by Tom Messere ]
Ianb
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Tom. For many of our cancer clients they are not working because of their cancer or it associated treatment. They therefore cannot be said to be not working due to coronavirus - they wouldn’t be working anyway. Therefore they are not eligible for SEISS.

[ Edited: 19 May 2020 at 10:13 am by Ianb ]
AlanEquity
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Hi there - as Victoria has said we lack any clear guidance at present on the trading question. In practical terms we have many members of our union Equity who claim ESA and work within the permitted work rules, typically averaged over a year, and who also continue registered with HMRC albeit with low trading profit figures. The obligation to register kicks in once someone exceeds £1,000 gross from self-employed activity so in that sense the system does envisage situations where people may be unwell or even seriously ill but still show sufficient badges of trade for it to be seen as viable self-employment. In the absence of anything SEISS specific from HMRC on this I would have thought these usual rules would apply.

Ianb
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Tom Messere - 12 May 2020 12:22 PM

b) for HB,  guidance has been issued that this will be earnings,  but to be looked out with a view to the impact on the 12 month average. So,  if business income has been hard hit then there may be no effect from SEISS replacing normal earnings.

Tom, have you got a link to that guidance as i am having trouble locating it?

From the other side
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