Combining voluntary work with claiming benefits is not
straightfoward, says Gary Vaux.
The government likes the idea of people doing voluntary work –
but do benefit rules make it easy or difficult for someone to
combine claiming with volunteering?
In theory, the government supports the idea of someone doing
voluntary work while they are unemployed or sick. The activity is
seen as worthwhile in itself but also, and almost as importantly,
as as a way of keeping the person in touch with paid
Voluntary work has, to many people, a rather dated feel. Yet
this work is being looked at by social services departments, with
the impetus coming from the requirement to consult with service
users and carers. On several occasions lately I’ve been asked
whether the social services department can “pay” service users and
carers to take part in statutory consultation exercises. Everyone
else at the meeting is being paid for their time and expertise, so
why not the service user? In addition, many social services
departments run schemes whereby “volunteers”, often reimbursed at
an hourly rate, provide support to people in their own homes.
Both arrangements throw up immense problems. The involvement in
consultation or caring may be “voluntary”. But the payment on offer
is often more than reimbursement of expenses. Current benefit rules
allow a person to do voluntary work as long as their only payment
is expenses. If they receive more than expenses, that is seen as
“work” by the Benefits Agency.
If the “worker” is on income support, the work must take less
than 16 hours per week and pay less than £20 – otherwise
income support is cut or lost altogether. If the “worker” is
claiming jobseekers’ allowance, only £5 can be earned.
Ministers have recently agreed to amend the rules applying to
means-tested benefits on expenses paid to claimants engaged in
voluntary activity. These changes result from recommendations in
the Policy Action Team (PAT) Report on Community Self-Help.
However, the change is only a minor one – in future, volunteers who
get reimbursed in advance will also have this income ignored.
Current rules ignore reimbursement of expenses already incurred,
but these payments must be retrospective. The voluntary sector has
claimed that the potential volunteer receiving benefits finds it
disproportionately difficult to meet out-of-pocket expenses in
advance and wait for reimbursement at the end of the week. If they
are given the money up-front, however, they risk having their
benefit cut under the existing rules.
As the Department for Work and Pensions (formerly the Department
of Social Security) says in its consultation paper: “The current
definition of voluntary work will not change. Nor will the current
rules for disregarding reimbursed expenses.”
In a separate consultation exercise, the DWP is also considering
changes to the therapeutic earning rules. At present, people on
incapacity benefit can earn up to £60.50 per week as long as
the work is classed by a GP as “therapeutic”.
In future, the DWP is proposing doing away with the need for GP
approval, so any work would be possible. The downside is that this
work could last for only six or 12 months. After that, the earnings
limit would be cut to just £20, as occurs for income
The Inland Revenue would probably be interested in voluntary
work involving consultation or caring – such work raises the issues
of tax liability as an employee or self-employed person, and
possible entitlement to the national minimum wage.
For more details on the tax liability of volunteer “carers”,
look at the Inland Revenue’s home page and click on “manuals”.
Bring up the “employment status manual” and in the “particular
occupations” section scroll down to “care workers”. Some of the
uncertainties involved are shown clearly here.