Welfare rights: Gary Vaux looks at how much work incapacity benefit claimants can do without losing entitlement
People who receive incapacity benefit can now do “permitted work” instead. The rules are different from those that governed therapeutic work and they were changed yet again in April.
Permitted work allows incapacity benefit claimants to try some paid work without jeopardising their weekly benefit so long as they tell the office that deals with their benefit that they are or have been working.
There are different types of permitted work:
The PCA is applied to benefit claimants because they are incapable of work. It includes people with progressive diseases such as Parkinson’s, MS, muscular dystrophy, rheumatoid arthritis, severe learning difficulties and severe mental illness. More than 750,000 people are exempt from the PCA – more than 30 per cent of the number of claimants, including 391,000 with mental health conditions. This is the new category of permitted work, added in April.
If a claimant earns up to the totals above, they can keep all their incapacity benefit or severe disablement allowance. But if they earn more, these benefits will stop. If they work 16 hours a week or more, the claimant needs to look at working tax credit as an alternative income source.
The problem often comes when claimants receive more than one benefit, especially if they are getting any means-tested benefits. Even disability living allowance (DLA) can be affected indirectly by the claimant working, as the Department for Work and Pensions sometimes uses starting work as a justification for reviewing entitlement.
But it’s those on income support and housing benefit who struggle most with the permitted work rules. Those claimants have to make use of the “disregarded earnings” rule – usually only 20 a week. Any earnings over that will mean a penny for penny reduction in income support and possible cuts in housing benefit too.
There is a good case to be made for aligning the means-tested and incapacity benefit rules, which would also help the government’s “welfare to work” agenda.
* This figure will increase this October in line with increases in the national minimum wage.
Gary Vaux is head of money advice, Hertfordshire Council. He is unable to answer queries by post or telephone. If you have a question to be answered please write to him c/o Community Care