Receiving payment for involvement and impact on welfare benefits
Organisations who deliver support services, such as Adult Social Care, the NHS and the charity sector, often work together with people who use those services to make decisions and plan how best to do things. This process is called ‘co-production’. Offering payment is one way of acknowledging the value that people with lived experience bring to the design, delivery and review of support services.
It is important to be aware that receiving payment for any co-production or involvement activity is likely to have an effect on some state benefits that you receive. Regardless of how payment is received (whether it is vouchers, gift cards or bank transfer) and where this payment came from (a local organisation, a health service or a charity), any payment is treated as earnings.
Two important points to remember:
Rules for specific benefits
If you receive more than one benefit, please read the rules below for each benefit you receive.
Limited Capability for Work
Limited Capability for Work (LCW) can be reviewed by the DWP at any point. This is why it is better to tell the DWP if you are about to start any paid work. The DWP could re-assess your LCW if they thought that the paid work was “incompatible” with your illness or disability. Any decision that found you fit for work would end benefit payment or NI credits, and any challenge to the decision could take a long time to overturn.
The earnings limit for Carer’s Allowance (CA) is £139 per week. If earnings go above this limit, entitlement to CA is lost. There are specific rules that apply when calculating net earnings for Carer’s Allowance. This includes ignoring some costs for alternative care for either the disabled person or a dependent child under 16, so that the Carer can do some paid work. More details on what are net earnings can be found here on Carers UK website: Carer’s Allowance and the earnings limit
Personal Independence Payment
PIP, DLA or AA is paid regardless of whether someone is in paid work or not. As long as there has not been a change in the level of needs, these disability benefits will continue. However, it is possible that starting paid work may trigger a review of the disability benefit if the DWP considers your paid work to be evidence of an improvement.
It is possible that a review of an award could reduce the payment or end entitlement. Any challenge following a negative decision could take a long time to resolve. A reduction or loss of a disability benefit, even if only temporary, could impact on other benefits including Carer’s Allowance and the Severe Disability Premium/Addition.
For these benefits, any earnings will have a small amount ignored from the net pay (£20, £10 or £5 per week) depending upon circumstances. Any remaining earnings are deducted £1 for £1 from your benefit. Therefore, as your earnings increase, your benefit reduces.
Once your earnings are deducted, if you are still entitled to some Income Support or Pension Credit, you will still receive full Housing Benefit.
Council Tax Support
If you are paid for your co-production work, you should get advice on how earnings may affect Council Tax Support. Each local borough or district council now have their own scheme. Please contact the council who you pay your council tax to for more information.
All figures used in this guidance are relevant from April 2023
This information is only an outline of the benefit rules that apply for people with lived experience who get involved in co-production activities. You can seek further advice from your local Citizens Advice service: www.citizensadvice.org.uk
Alternatively, for Surrey residents involved in co-design or co-production activities, you can get advice from Surrey Welfare Rights Unit by emailing email@example.com or leaving a voicemail message with your contact details on 01483 492949. Let us know if you want us to respond by email or phone.