People with lived experience and carers

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:

  1. If you are reimbursed for your costs, for example, a train fare that you paid to attend a meeting, these expenses are always ignored and would not affect any benefits that you receive. Expenses can include:
    • Travel
    • Childcare costs
    • Replacement Carer
    • Food or drink, where necessary
    • Stationery, phone calls
  1. If you are offered a payment for your involvement and you turn it down, then this is fine. You will not be treated as having received the payment.

Rules for specific benefits

If you receive more than one benefit, please read the rules below for each benefit you receive.

Universal Credit
If you receive Universal Credit (UC), any paid work that you can do could affect your benefit. However, the following should be noted:

  • If you receive Universal Credit and have limited capability for work status (LCW), as long as your condition or disability has not changed, doing some paid work should not affect you’re your LCW status.
  • You can’t be assessed for LCW if you are earning more than £722 per calendar month (from April 2023) unless you also receive a disability benefit (such as Personal Independence Payment (PIP), Disability Living Allowance (DLA) or Attendance Allowance (AA)).   If you already have LCW, this will continue.
  • How your earnings are treated will depend on your circumstances, but UC is often more generous when compared to how other means-tested benefits treat earnings.
  • You must tell Jobcentre Plus that the work is ‘Service User or Carer involvement’ so that any expenses are ignored and, if you are offered a payment and turn it down, this is fine for benefit purposes.
Contribution-based Employment and Support Allowance
Income-based Employment and Support Allowance
New-Style Employment and Support Allowance
National Insurance Credits for limited capability for work

  • If you receive Employment and Support Allowance (ESA) you can earn up to £167 a week under ‘Permitted Work” rules.
  • You must keep your working hours below 16 per week and your earnings below £167 per week or your ESA will stop.
  • If you are already doing some Permitted Work, any additional paid work (including co-production work) will be added to your existing work in that same week.
  • Permitted earnings are ignored for ESA.  If you are claiming ESA, you should complete a PW1 form before starting work.  Tell Jobcentre Plus that the work is ‘Service User or Carer involvement’ so that any expenses are ignored and if you are offered payment and you turn it down, then this is fine for benefit purposes.
  • PW1 form can be downloaded from here:  PW1 Form
  • Further information on Citizens Advice website:  Work you can do whilst getting ESA

Limited Capability for Work
(ESA, UC, National Insurance Credits)

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.

Carer’s Allowance

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
Disability Living Allowance
Attendance Allowance

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.

Income Support
Pension Credit
Housing Benefit

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 advice@swru.org  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.

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