Search rightsnet
Search options

Where

Benefit

Jurisdiction

Jurisdiction

From

to

Forum Home  →  Discussion  →  Covid-19: Welfare benefit issues  →  Thread

Amount of SEISS grant taken into account for calculating UC

Anna S
forum member

Turn2Us

Send message

Total Posts: 5

Joined: 12 March 2019

Has anyone seen any guidance on how much of the SEISS grant should be taken into account when calculating UC?

Specifically, should it just be the amount paid, minus tax and NI, or can business expenses incurred in the AP be deducted?

I would have assumed that it was just amount paid minus tax and NI, since it is based on profits as declared to HMRC, but some sites seem to be saying that people can deduct expenses.

Ianb
forum member

Macmillan benefits team, Citizens Advice Bristol

Send message

Total Posts: 785

Joined: 24 November 2017

My understanding is the SEISS is treated as self employed income so will be offset by any self employed expenses incurred and declared in the same AP, the difference being the self employed earnings in the usual way. Can’t find any specific guidance on this though.

As an aside, I have heard elsewhere that DWP have added an item to the self employed declaration which specifically asks about receipt of SEISS - but I can’t confirm if that is true or not.

(EDIT to correct typo)

[ Edited: 18 May 2020 at 05:14 pm by Ianb ]
Charles
forum member

Accountant, Haffner Hoff Ltd, Manchester

Send message

Total Posts: 1045

Joined: 27 February 2019

Everything in UC is cash-basis. So the SEISS will count in full as income, and any expenses paid in the month will be deducted from the overall income for the month.

EDIT: Snap!

[ Edited: 18 May 2020 at 05:18 pm by Charles ]
LITRG
forum member

Head of Low Incomes Tax Reform Group

Send message

Total Posts: 85

Joined: 16 June 2010

DWP guidance is noticeably absent - we have been trying to get confirmation on the small business grant treatment for weeks as it seems inconsistent answers are given by claimant facing staff.

I wonder why they would need a separate SEISS box?

Ianb
forum member

Macmillan benefits team, Citizens Advice Bristol

Send message

Total Posts: 785

Joined: 24 November 2017

victoriatodd - 19 May 2020 02:19 PM

I wonder why they would need a separate SEISS box?

I can’t confirm that the information was correct but it might have been added as a prompt given how many claimants will be new to this and not know their way around the system.

Gareth Morgan
forum member

CEO, Ferret, Cardiff

Send message

Total Posts: 1825

Joined: 16 June 2010

victoriatodd - 19 May 2020 02:19 PM

I wonder why they would need a separate SEISS box?

I assume, for the avoidance of doubt.

Confused
forum member

Assistant income advisor - Advice Works Renfrewshire Council

Send message

Total Posts: 6

Joined: 18 June 2010

If the grant received is treated as earnings then the tariff should apply but if it is paid as a 3 monthly lump sum how will UC work that out,

On a calculation of receiving a grant of £1600 for 3 months average earnings that equals £533.60 per month. If the claimant has housing costs they would still be due some UC.  If the taper is applied then the earnings counted would be £336.17 but if UC look and think your earnings are £1600 they’ll probably close the claim. 

Can the claimant just put a note on their journal saying this is the SEISS grant and is for 3 assessment periods not one?

Gareth Morgan
forum member

CEO, Ferret, Cardiff

Send message

Total Posts: 1825

Joined: 16 June 2010

Confused - 20 May 2020 02:49 PM

Can the claimant just put a note on their journal saying this is the SEISS grant and is for 3 assessment periods not one?

They could ... but it wouldn’t achieve anything.  It will be treated as income for that AP; with all the consequences of that.

If they had received the same amount as earnings from self-employment in that AP, after earning nothing in the previous 2 APs, the same result would occur.

HB Anorak
forum member

Benefits consultant/trainer - hbanorak.co.uk, East London

Send message

Total Posts: 2521

Joined: 12 March 2013

On a calculation of receiving a grant of £1600 for 3 months average earnings that equals £533.60 per month. If the claimant has housing costs they would still be due some UC.  If the taper is applied then the earnings counted would be £336.17 but if UC look and think your earnings are £1600 they’ll probably close the claim.

I’ve said it before and I’ll say it again: for a given amount of earnings receiving during a given period of time, you will always be better off overall if there are periods within that given period of time in which you do not qualify for UC because the earnings are too high than if you qualify for at least some UC throughout - especially this year before the surplus earnings disregard is reduced to £300.  Treating the SEISS as income in one AP will be to the claimant’s advantage if it results in nil UC for that AP, subject to the hassle of having to reclaim.

Stuart
Administrator

rightsnet editor

Send message

Total Posts: 835

Joined: 21 March 2016

New regs just out confirm how SEISS, CJRS paid to SE claimants for their employees, and other types of business loan support are treated under UC - Universal Credit (Coronavirus) (Self-employed Claimants and Reclaims) (Amendment) Regulations 2020 ...

the explanatory memorandum confirms that -

- SEISS is treated as SE earnings in assessment period of receipt;
- CJRS paid to SE claimants for their employees is not taken into account as earnings for the self-employed claimant;
- coronavirus support via a loan or grant to aide with business recovery will be disregarded for a period
of 12 months; and
- claimants will be “treated as making” a new UC claim for the following 5 assessment periods if income takes them off UC, to enable new claims as soon as income reduces, and allow for surplus earnings to be applied to the UC award without a claim being needed.

 

[ Edited: 20 May 2020 at 04:03 pm by Stuart ]
Ianb
forum member

Macmillan benefits team, Citizens Advice Bristol

Send message

Total Posts: 785

Joined: 24 November 2017

Stuart - 20 May 2020 04:00 PM

New regs just out confirm how SEISS, CJRS paid to SE claimants for their employees, and other types of business loan support are treated under UC - Universal Credit (Coronavirus) (Self-employed Claimants and Reclaims) (Amendment) Regulations 2020 ...

the explanatory memorandum confirms that -

- SEISS is treated as SE earnings in assessment period of receipt;
- CJRS paid to SE claimants for their employees is not taken into account as earnings for the self-employed claimant;
- coronavirus support via a loan or grant to aide with business recovery will be disregarded for a period
of 12 months; and
- claimants will be “treated as making” a new UC claim for the following 5 assessment periods if income takes them off UC, to enable new claims as soon as income reduces, and allow for surplus earnings to be applied to the UC award without a claim being needed.

This might explain why a separate SEISS box could be needed in order to capture the fact that SEISS has been received and thereby bring these regulations into play in respect of keeping the claim open.

Gareth Morgan
forum member

CEO, Ferret, Cardiff

Send message

Total Posts: 1825

Joined: 16 June 2010

Ianb - 20 May 2020 05:12 PM

This might explain why a separate SEISS box could be needed in order to capture the fact that SEISS has been received and thereby bring these regulations into play in respect of keeping the claim open.

Yes, so they can be put onto liveservice UC

EKS_COTTON
forum member

Tax and Welfare Rights Officer, Equity

Send message

Total Posts: 259

Joined: 10 March 2014

Have read over SI.No.522/2020 and the explanatory memorandum.

appreciate that we are waiting on DWP guidance but wanted to check my understanding in relation to SEISS received by a sole trader and surplus.

Para 7.10 of the explanatory memorandum

if the earnings received as an employee under the CJRS or as a self-employed person under the SEISS (within the assessment period), are more than £2,500 over the amount that would normally cause the UC claim to stop i.e. in the case of a lump sum;
any amount over the £2,500 limit will be deducted from following assessment period(s) if the claim is ‘made’ within six months of the previous claim ending; and
will continue until there is no surplus remaining.’

‘if the claim is ‘made’ within six months of the previous claim ending’ - does this mean that claimants in this position still have to reclaim?

Daphne
Administrator

rightsnet writer / editor

Send message

Total Posts: 3107

Joined: 14 March 2014

No I don’t think so because the new reg 32A (2) which is inserted into the claims and payments regs states -

The Secretary of State may, subject to any conditions the Secretary of State considers appropriate, treat the claimant (or joint claimants) as making a claim on the first day of each subsequent month, up to a maximum of 5, that would have been an assessment period if an award had been made or, as the case may be, if the award had continued.

Gareth Morgan
forum member

CEO, Ferret, Cardiff

Send message

Total Posts: 1825

Joined: 16 June 2010

How did Live Service deal with other changes of circumstance when carrying out automatic reclaims?

[ Edited: 21 May 2020 at 11:52 am by Gareth Morgan ]
EKS_COTTON
forum member

Tax and Welfare Rights Officer, Equity

Send message

Total Posts: 259

Joined: 10 March 2014

Thanks Daphne - just want a clear statement and procedure to advise further.

Daphne
Administrator

rightsnet writer / editor

Send message

Total Posts: 3107

Joined: 14 March 2014

I’ll email DWP - I agree the fact that the regulation says MAY means it’s all a bit woolly!

edit - Just thinking about it a bit more I think the Secretary of State will only do this to use up surplus earnings. So if surplus earnings are not an issue then I think the claimant should press the rapid reclaim button to make sure they get reassessed the next month.  But I’ll still send an email…

[ Edited: 21 May 2020 at 01:47 pm by Daphne ]
Paul_Treloar_AgeUK
forum member

Information and advice resources - Age UK

Send message

Total Posts: 2598

Joined: 7 January 2016

Gareth Morgan
forum member

CEO, Ferret, Cardiff

Send message

Total Posts: 1825

Joined: 16 June 2010

If it helps, our surplus income reckoner is one of the ones we’ve made free ‘for the duration’  at https://www.ferret.co.uk/reckoners/free/  and surplus income is going to be covered in my workshop at the NAWRA virtual conference in June.  See https://www.nawra.org.uk/ if you aren’t, yet, a member.

EKS_COTTON
forum member

Tax and Welfare Rights Officer, Equity

Send message

Total Posts: 259

Joined: 10 March 2014

Daphne - 21 May 2020 01:37 PM

I’ll email DWP - I agree the fact that the regulation says MAY means it’s all a bit woolly!

edit - Just thinking about it a bit more I think the Secretary of State will only do this to use up surplus earnings. So if surplus earnings are not an issue then I think the claimant should press the rapid reclaim button to make sure they get reassessed the next month.  But I’ll still send an email…

Thanks so much daphne

EKS_COTTON
forum member

Tax and Welfare Rights Officer, Equity

Send message

Total Posts: 259

Joined: 10 March 2014

Gareth Morgan - 21 May 2020 02:33 PM

If it helps, our surplus income reckoner is one of the ones we’ve made free ‘for the duration’  at https://www.ferret.co.uk/reckoners/free/  and surplus income is going to be covered in my workshop at the NAWRA virtual conference in June.  See https://www.nawra.org.uk/ if you aren’t, yet, a member.

Yes! thanks so much for this it has been essential.  Really helpful thank you.  I think I am already a member of NAWRA so will check that also.

 

Gareth Morgan
forum member

CEO, Ferret, Cardiff

Send message

Total Posts: 1825

Joined: 16 June 2010

It’s just been updated.  It was picking up threshold dates from a link that hasn’t been updated, so was applying the harsher threshold for the last few weeks.