genuine and effective self-employment

Some opinions sought on this one.

My cleint is a Latvian national who has had her HB stopped because her self employment is not seen as genuine and effective, due to low earnings.  Previously she got HB on the basis of similar earnings but they now seem to have changed their mind and superseded the award.  She earns about £50 per week on average. Still in reciept of CTC and CHB.

She works on a commission only basis at a hairdressing salon, getting either 40 or 50% of what the client pays the salon, depending on the type of work done - and the salon provides all the equipment and products.  The salon owner does all the advertising and so on, although my client has tried to drum up new business via word of mouth round her friends and people she studies English with.  Cl is in the salon a regular 24 hours per week although says will use the time to study for her ESOL course when she is not with a client.  She is registered with HMRC and pays her own tax and NI. 

2 questions really -
1. is she arguably employed, rather than self employed?  It seems more like an employment relationship to me.  If she is employed but obviously earning far less than minimum wage how will that affect her chances of showing the work is genuine and effective?  (In other words do people think should I argue she is really employed to support her case, or will that make matters even worse)?

2. the HB decison letter mentions that she does not earn enough to suport herself and her son.  I thought caselaw had decided the fact that someone needs means tested benefits to top up their income was of no relevance to whether somene is doing genuine and effective work.  Has that changed?