The following text is taken from an advice document provided to support organisations and it describes under what circumstances, Permitted work is allowed. If you are currently claiming benefits but want to start building a small enterprise, this initiative might be one way in which you could do this without immediately losing your current income.
1. The Permitted Work rules support the Government’s commitment to removing barriers to work for people with long term health problems. They strengthen the aim of work as a stepping-stone off benefit and into employment.
2. The new rules took effect on 8 April 2002 and apply to people who are getting one of the following benefits because of illness or disability:-
- · Incapacity Benefit
- · Severe Disablement Allowance
- · National Insurance Credits
- · Income Support, Housing Benefit and Council Tax Benefit
They also allow people to earn small amounts to help them maintain contact with the labour market and for social inclusion purposes.
3. The new rules allow customers to do any of the following:-
a) i) work for less than 16 hours a week, on average, and earn no more than £81.00 a week from 1 October 2005 (£78.00 prior to 1 October 2005) for 26 weeks. This is called Permitted Work Higher Limit (PWHL); and
ii) extend this for a further 26 weeks if an officer of, or a person providing services to the Department for Work and Pensions agrees that an extension will help increase their capacity towards work of 16 hours or more a week. This person could be a Job Broker, a Disability Employment Adviser or a Personal Adviser; and
iii) do subsequent periods of PWHL, for 52 weeks, once a 52 week gap period has been served after the previous period of PWHL. This is called Permitted Work Higher Limit Subsequent (PWHLS)
b) work and earn no more than £20 a week, at any time, for as long as they are on benefit. This is called Permitted Work Lower Limit (PWLL);
c) do supported permitted work and earn no more than £81.00 a week (£78.00 prior to 1 October 2005) for as long as they are on benefit. This is called Supported Permitted Work (SPW).
4. Customers can only do one category of permitted work at any one time.
5. The Permitted Work rules do not affect incapacity benefits customers who are doing work:-
- on a voluntary basis; or
- as a councillor; or
- for one day a week as a member of an appeal tribunal with a disability qualification; or
- as a DLAAB member for one day a week.; or
- which is part of a hospital treatment programme and is done under medical supervision while the customer is an in -patient or is regularly attending as an out-patient
6. Customers no longer need their doctor’s approval before telling the DWP about permitted work. And it should be stressed that they do not have to undergo a medical test just because they are doing permitted work. However, any medical test that may be due at the time they tell us about permitted or during a period of permitted work will go ahead as planned.
Categories of permitted work
Permitted Work Lower Limit (PWLL)
7. A customer can work and earn no more than £20 a week, at any time, for as long as they are on benefit. Normally the customer’s employer should pay an hourly rate of at least the National Minimum Wage (see paragraphs 54-56).
Supported Permitted Work (SPW)
8. A customer can work and earn no more than £81.00 a week (£78.00 prior to 1 October 2005) for as long as they are on benefit. Earnings may affect the amount of Income Support/Housing Benefit/Council tax benefit paid to the customer (see paragraph 52). The work must be supervised by someone who is working for a local or public authority or voluntary organisation, whose job it is to provide or find work for people with disabilities. For example this could be work done in the community, in a sheltered workshop or for a Social Firm. Normally the customer’s employer should pay an hourly rate of at least the National Minimum Wage (see paragraphs 54-56).
9. SPW is intended to help those people whose disabilities restrict their work capacity to less than 16 hours a week, but is still more than the few hours covered by PWLL.
10. The support and supervision of the person in the workplace should come from an agency other than the NDDP PA, Jobbroker or DEA. However, in some circumstances the placement and supervision may be from different people within the same organisation.
11. This support must be ongoing and regular although the frequency of contact between support worker and customer may vary depending on the needs of the customer. However, it is not sufficient that the only support is provided by the employer, for example, in the form of a buddy or mentor in the workplace.
12. The overarching criteria for people covered by the supported permitted work arrangements are that:-
the work must be:
- supported or supervised by a person employed by a public or local authority or voluntary organisation engaged in the provision or procurement of work for persons who have disabilities, or
- part of a sheltered employment scheme where the supervision is integral to the provision of sheltered work ;
- the support and supervision must come from an external agency, not just from natural supports in the workplace;
- the support is ongoing and regular although the frequency of contact may vary (from daily to once a quarter, for example). The means of contact can fluctuate – either face-to-face or by telephone.
13. The hours restrictions above do not apply to a customer who is doing work which is part of a hospital treatment programme and is done under medical supervision while the customer is an in-patient or is regularly attending as an out-patient
Permitted Work Higher Limit (PWHL)
14. A customer can work for less than 16 hours a week, on average, and earn no more than £81.000 a week (£78.00 prior to 1 October 2005 for a fixed 26 week period starting from the date that work begins. Normally the customer’s employer should pay an hourly rate of at least the National Minimum Wage (see paragraphs 54-56).
15. This fixed period can be extended for a further 26 weeks if there is appropriate evidence to show that by undertaking a further period of work the customer is likely to improve their capacity to engage in full-time work.
16. Before a customer can work in a PWHL extension period they must provide appropriate evidence that, by undertaking further work they are likely to improve their capacity to engage in full-time work. This could be:-
- evidence from an officer of, or a person providing a service to the Secretary of State who is authorised by the Secretary of State for that purpose; and
- evidence (if any) from any other person (including the person doing the work).
17. A person providing services to the Secretary of State will normally be a Job Broker, a Disability Employment Adviser or a Jobcentre Plus Personal Adviser. Evidence will normally be in the form of a signed tear off to the letter sent to the customer towards the end of the PWHL period. See Paragraph 38 discusses this procedure in more detail.
18. If there is no evidence from an officer of, or a person providing services to the Secretary of State that the customer is working towards full time work, the case will be referred to the Decision Maker at the office which pays the customer’s benefit. They will then consider whether there is appropriate evidence. For example, whether the customer has:-
- increased their hours; or
- learnt new skills; or
- taken part in a work placement programme; or
- a strong chance of moving to work of 16 hours or more after 52 weeks.
This list is illustrative and not intended to be comprehensive.
Frequency of applications for permitted work [Permitted Work Higher Limit Subsequent (PWHLS)]
19. A person trying some permitted work under the new rules may not reach a successful outcome at their first attempt. Therefore a customer will be able to try PWHL any number of times while they are getting an incapacity benefit. But if they have previously completed a PWHL period there must be a gap of at least 52 weeks between the end of one PWHL period and the beginning of the next. The customer can still earn up to £20 a week or do supported permitted work in the gap period.
20. Before a customer begins a subsequent period, there must be appropriate evidence that by undertaking the work they are likely to improve their capacity to engage in full-time work. SEE Appropriate evidence paragraphs 16-18 . Each subsequent period will last for 52 weeks from the date work started. There will be no requirement to apply for an extension after 26 weeks.
PWHL and PWHLS Fixed Periods
21. Permitted work will be allowed for a continuous fixed period commencing with the date the person first started work. A customer can change jobs within the fixed period of work. However, they should notify the DWP of any change of employment. A customer may also have more than one job but the total hours and earnings must not exceed the set limits.
22. A fixed period cannot be lengthened for any reason, even if the job ends or the customer goes on holiday or on sick leave.
Permitted Work Notification Procedures
23. Customers will be encouraged to tell the DWP about the work when they start. However, the new rules allow people to start work before they have informed the Department. This is to ensure that people do not lose a job because they do not have time to tell the Department; for example some one is offered a job on Friday to start the following Monday.
24. For PWHL and PWHLS, customers must give written notification of the work within 42 days of starting.
25. For PWLL and SPW, a customer’s permitted work is treated in the same way as any other change of circumstances and should be notified as soon as possible. At the latest, the Department must be told before the work ceases.
26. Form PW1 has been developed for customers to tell the DWP about permitted work. They can get a copy from their local benefits office.
27. Customers wanting to do SPW should ask their professional support worker to complete part 3 of form PW1.
28. Once the Department has received the completed PW1 they will be able to decide which category of permitted work applies. Staff should action cases quickly so as not to put at risk an offer of employment.
29. If the work falls within one of the permitted work categories, the customer will be sent notification letter D/LPW1. A copy is attached at Appendix 1.
30. If the work does not fall within the permitted work rules, they will be informed in letter D/LPW2. A copy is attached at Appendix 1. If the work does not fall within the permitted work rules and the work has already started, the case will be referred to the Decision Maker for an outcome decision on the period of work.
Extending the PWHL period
31. At week 20 of the PWHL period the customer will be sent form PW6 setting out their options at week 26. A copy is attached at Appendix 1.
32. At week 26 a customer can :-
- request an extension to PWHL; or
- stop claiming benefit; or
- stop work; or
- notify DWP that they want to do PWLL or SPW
33. Customers wishing to extend their PWHL period must provide the appropriate evidence that a further period of work is likely to improve their capacity to engage in work of 16 hours or more. See paragraphs 16-18 .
34. The customer will ask the Job Broker, Disability Employment Adviser or Personal Adviser to complete part 1 of the PW6 to indicate that they are working with the customer and that a further period of work is likely to improve their capacity to engage in work of 16 hours or more.
35. If the DWP agrees that there is appropriate evidence to allow an extension to the PWHL, the customer will be sent a letter D/LPW4 which tells them when the extension period will come to an end.
36. Customers who return the PW6 to say that they want to do SPW or PWLL will be sent a new form PW1 to complete. If this is not returned, customers will be asked again about their work plans with letter D/LPW8. A copy of this is attached at Appendix 1.
37. Customers who fail to reply to the PW6 within 14 days, will be sent a reminder letter D/LPW6 and a further reminder D/LPW7 if there is still no response. Benefit cannot be paid past week 26 if the DWP does not receive notification of work plans at the end of the 26 week period.
PWHL extension period coming to an end
38. At week 46 of an extension period, customers are sent a form PW7 telling them that their PWHL extension period is coming to an end. A copy is attached at Appendix 1. The letter also tells them about their work options from week 52.
They are to:-
- carry on working and stop claiming benefit; or
- do PWLL or SPW; or
- stop working
39. When PW7 is returned DWP staff will action as per the customer notification. Customers wanting to do PWLL or SPW will be sent a form PW1 to complete.
40 Customers who fail to reply to the PW7 within 14 days will be sent a reminder letter D/LPW6 and a further reminder D/LPW7, if there is still no response. Benefit cannot be paid past week 52 if the DWP does not receive notification of work plans at the end of the 52 week period.
41. Customers who have completed a PWHL period and remain in the same period of incapacity for work will be sent a letter at week 46 of their 52 week gap period. This will remind the customer that they are coming to the end of their gap period and that they can do another fixed period of work from the relevant date. People wanting to do a subsequent period of PWHL should complete form PW52. A copy of this is attached at Appendix 1.
Review of PWLL or SPW
42. Customers doing SPW or PWLL will have their circumstances reviewed every two years using form PW8 or PW9. Copies are attached at Appendix 1.
How breaks in claim affect PWHL and PWHLS
43. Customers who stop claiming benefit while in a PWHL or PWHLS period will
return to that same cycle of permitted work, provided they reclaim benefit within 8 weeks.
Customer starts permitted work 09/05/2005
Permitted work period 09/05/2005 to 06/11/2005
Customers IB claims terminates 31/07/2005
Customer reclaims from 10/09/2005
Permitted work accepted from 07/10/2005
Remaining permitted work period 10/09/2005 to 06/11/2005
44. In the above example, the customer reclaimed benefit within 8 weeks or less. Therefore, they return to the same PWHL period they were in before they left benefit.
45. Customers who stop claiming benefit for a spell of more than 8 weeks and notify a further period of work will qualify for a new PWHL 26 week period.
Customer starts permitted work 09/05/2005
Permitted work period 09/05/2005 to 03/11/2005
Customers IB claims terminates 31/07/2005
Customer reclaims from 10/10/2005
Permitted work accepted from 17/10/2005
New 26 week permitted work period 17/10/2005 to 16/04/2006
46. In the above example the customer stopped claiming benefit for a spell of more than 8 weeks. When reclaiming benefit the customer qualifies for a fresh 26 week PWHL period.
Earnings and Hours Limits
47. Earnings are calculated in the same way as they were for therapeutic work. Normally, the national minimum wage will apply. Usually there will be no requirement to verify earnings. However, the customer will be contacted if there are discrepancies and may be asked to provide wage slips. Any cases that present special difficulties will be referred to the Decision Maker. Normally the customer’s employer should pay an hourly rate of at least the National Minimum Wage (see paragraphs54-56).
48. Earnings from self employment should be considered on the individual facts of each case. If a self-employed person does not derive a regular income from their work the Decision Maker can look at their income over a period of time to obtain the most accurate equivalent weekly income
49. When considering PWHL / PWHLS permitted work may only be
disregarded if a person works for less than 16 hours a week. It is the average number of hours worked which is important. Even if someone works for 16 hours or more in a week they are not treated as capable of work in that week if the average number of hours which they normally work is less than 16. If they work for 16 hours or more in a week the decision maker should consider the average hours:
if the person has a normal work cycle, over the period of that cycle;
otherwise, over the week in question and the four weeks before it.
50. Only the hours actually worked (as opposed to the hours someone is contracted to work) and weeks in which they actually do any work (as opposed to weeks of sickness or holiday) should count.
51. People receiving Income Support (IS) on the basis of incapacity can do permitted work and earn up to £81.00 a week (£78 prior to 1 October 2005) without their incapacity status being affected. Provided that the work is accepted as permitted work their incapacity status is not affected and entitlement to IS will similarly not be affected.
52. However the amount of earnings will affect the amount of IS payable. An amount of earnings can be disregarded (ignored) each week, when calculating the amount of Income Support to which a person is entitled. People receiving the Disability Premium (DP) as part of their IS, are entitled to a disregard of £20.00 per week. For others, the standard disregards are £5.00 per week for a single person, and £10.00 per week where the customer has a partner. Earnings over the disregard will reduce the amount of IS payable on a penny for penny basis. Additionally the amount of earnings can affect any Housing Benefit or Council Tax Benefit in payment.
53. An internal form is used to exchange information about permitted work between the Incapacity Benefit and Income Support sections within the DWP. Customers should advise their Local Authority about permitted work if they are getting Housing Benefit or Council Tax Benefit as they would any other earnings.
National Minimum Wage (NMW)
54. The national minimum wage legislation applies to all doing permitted work who are “workers” under the National Minimum Wage Act 1999.. This is no different from the previous arrangements for people undertaking therapeutic work.
55. Customers applying for permitted work where their earnings are less than the National Minimum should be advised of their rights under the NMW legislation.
56. Exceptionally, some customers may be undertaking therapeutic activities for which they are not defined as “workers” and would not fall within the scope of the NMW. Any organisation who is considering paying less than the NMW or needs guidance as to whether someone is a worker for the purposes of the NMW Act should seek advice from the NMW helpline 0845 6000 678 (Mon - Fri 8am - 6pm) or visit their site on the internet at http://www.tiger.gov.uk/nmw/emp/index.htm.