Should I claim Working Tax Credit? Worried I might lose out...

[Alastrum]

I'm currently unemployed, claiming JSA, and have been on New Deal for a while trying to set up a small business with help from TNG and the New Deal scheme.
The programme I'm on comes to an end soon: according to the ideal scenario, it's supposed to have helped me start up in business, by now I should be trading, making a small income, and the idea is that at the end of the scheme I sign off from claiming JSA, but supplement my small income from trading with Working Tax Credit.
However, for a number of reasons, my business hasn't been as successful as I would like yet (although I think it still might be in the future, given more time), and in fact I have yet to earn a single penny.
Despite this, all my New Deal advisors are really pushing me to sign off and take Working Tax Credit, rather than continue to claim JSA (it's almost like they're on commission for this! Maybe they are?). While I would love to stop claiming JSA and get out of the 'JobCentre Culture', the fact is the most I would get on WTC is just under £70 per week (for a couple), compared to the £90 we get from JSA. In addition to this, I'm concerned about my claim for Housing Benefit, and whether being on WTC would alter the amount of Housing Benefit I get.
It seems to me that WTC is designed for people who are making a little bit of money and need to supplement their income. But I'm not making any money at all, so would I even qualify for WTC in the first place? Would I lose some of my Housing Benefit (which would make it impossible to stay where we're living, as we couldn't afford to make up the shortfall)?
Or should I just stay on JSA for the time being, and hope my little business improves?
Any advice gratefully received. Many thanks.

[Goldlady]

There is a reason for them pushing you to go onto WTC. It takes you out of the unemployment statistics. Over the years there have been many schemes which allow the powers that be to artificially reduce the number of unemployed people in this country. However it is not as bad as it sounds. You will then be able to get on with establishing your business and if you make no money you will get the WTC and you will still be able to claim Housing Benefit. WTC is based on the number of hours a week you are working and you can even make a loss (which we have done several times). I would go for it, as if you are spending time sorting your business out then they could say you weren't available for work and all that jazz.

Go for it is my advice.

[PriorityOne]

Not sure how much you need to be earning before you go over the threshold for Housing Benefit/Council Tax Benefit though.... and WTC is also based upon the amount you have coming in.

It might be worth 'phoning your council offices in order to check and/or have them send something out to you that confirms it in writing....

Goldlady is right.... DWP have been "re-arranging" the official stats for years.

[Alastrum]

Thanks for your responses. I see what you're both saying, and it is tempting to just go for it. To give a little background info: we've had one heck of a year, with two forced house moves, and countless problems over benefits. Now we finally seem to have settled down in a nice flat in a nice area, and we're both looking foward to improving our general situation. What I'm most worried about here is the loss of Housing Benefit, even a small proportion of it, as if we don't get the full amount from the council we will not be able to afford to make up the shortfall, and we'll be forced to move out again, with all the hassle that goes with it. So I really need to know that the amount of Housing Benefit we currently get will remain virtually the same (give or take a tenner).

[Goldlady]

If your WTC is going to be £70 when your JSA was £90 then you will not lose out on the Housing Benefit as they will view it in the same way. You might get more if you weren't getting all of your rent. It is a bit more of a hassle claiming it when you are self-employed as there seems to be an assumption by the powers that be that if you are self-employed you have a wad of notes in your back pocket I wish!! But if you are just starting out and aren't making any money from the business then you should be fine.

If you do decide to go ahead, you must keep a record of all the money you pay out for the business as you will need to offset it against future income.

[davethorp]

In my experience it is best not to disturb the status quo regarding housing benefit.

My partner and I have switched from JSA to income support and vice versa several times and each time this has happened we've had housing benefit on our case about a change of income despite income being exactly the same. In one instance housing benefit actually stopped out claim because their computers didn't talk to JSAs computers right, got me in a lot of grief with my landlords who were on my case when housing benefit was suspended. Not to mention the wonderful letter I got from housing benefit requesting further information before a deadline of the day before I got the letter.

If your housing benefit section is competently managed you may be ok when you make the switch to the different benefit but be prepared for the worse

[Goldlady]

When we claimed housing benefit it took months and it was only because we got our local MP on the case that we got it at all. MPs and local councillors are good people to contact if you are getting any grief.

[Alastrum]

I must say that my local council do seem quite competent and well-organised. Probably because it's a fairly well-to-do area, and they probably don't have many residents on benefits, meaning there is less of a workload for them. When I've lived in areas with high unemployment, the council has been rubbish, with massive backlogs of cases to work through. This gives me a little more confidence that the 'switch', if I go for it, might be well managed. If I still lived in the old area, I'd never risk disturbing the status quo.

I'm currently trying to sell off a load of stuff on eBay to raise a 'safety net' of one month's rent, just in case anything should go wrong

[sallysas]

Sadly, it used to be the case that if your benefit switched from JSA or IS or visa versa HB was cancelled on the mistaken assumption that you were no longer claiming, as the claimants were supposed to keep their local council informed - very unfair if you didn't know this. This is no longer the case here in Brum so it may be true elsewhere.

Good luck with starting your own business, can I suggest you find a good accountant as the council will want Income & Expenditure sheets for the end of your financial trading year. WTC will also need this; how else are they to work out the amount of tax credits you will be entitled too.

[Alastrum]

Thanks for that. I went ahead, and am now on WTC. Happily, the council didn't seem to raise any objections, although I am still waiting to find out how much HB we will get. As our actual living income has now dropped, I'm hoping our HB will go to max or near max as a result.

In the meantime, I've got my work cut out building my business up!

[davethorp]

Originally Posted by sallysas

Sadly, it used to be the case that if your benefit switched from JSA or IS or visa versa HB was cancelled on the mistaken assumption that you were no longer claiming, as the claimants were supposed to keep their local council informed - very unfair if you didn't know this. This is no longer the case here in Brum so it may be true elsewhere.

Might also be the case here now, we've recently changed benefit again and haven't had the usual furore from the council over HB

[sallysas]

Hope it all comes together for you this year then.

IT IS VERY IMPORTANT THAT THE COUNCIL IS KEPT INFORMED ABOUT ANY CHANGES. If your income goes up or down you must tell them within a month of the change. If your income drops your HB will increase and be backdated to the date of the change. Outside of a month and the change (if it results in more HB for you) takes effect the Monday after you inform the council. E.G Your income dropped 28/11/07 but you tell the council today 10/01/08 so the change takes effect 14/01/08 - bum!!!
With an increase in your income the council will take the change back to the date it happened which will naturally happen as the business improves. If you are worried about putting original documents in the post copies that have been stamped at jobcentre plus offices will be accepted. I work for benefit services but my knowledge is limited. So, a good rule of thumb is - any change let the council know. All the very best, Sally