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Service user consultation payments: how they affect benefits

This guide is for you if you are a patient, carer or service user of health or social care services and if you are getting actively involved in helping to develop or improve these services. You may be giving feedback, participating in consultations, research or similar activities.  The guide is about the expenses and payments for your involvement that you might be offered. It offers answers to some frequently asked questions and suggests where you might get advice about your particular circumstances.

The guide does not attempt to answer all of the questions you might have about being offered expenses or payment for involvement; this is a complex area and it would be difficult to cover everyone’s individual circumstances. We strongly advise you to get expert advice about your own personal financial circumstances before accepting payment for your involvement.

Key points

  • it is good practice for an organisation to cover any expenses you incur as a result of your involvement and to offer you a payment - you should not be left out of pocket as a result of becoming actively involved.
  • the organisation offering involvement should provide you with clear written information about the nature of the involvement, the duration and frequency of involvement, the amount they are offering you and what expenses they will cover.
  • if you are receiving state benefits, receiving any form of payment for involvement may affect your benefit claim, and therefore it is important that you also get expert advice from a benefits advisor regarding your personal circumstances.
  • it is your choice whether or not you accept payment for your involvement.
  • receiving payment of a fee for involvement is likely to have implications for you if you are currently employed, unemployed, receiving state benefits or retired - this is because the payment you receive will be treated as earnings.

When you are planning to start involvement activities, you should contact the Jobcentre. It is advisable to provide an official letter addressed to the Jobcentre from the organisation asking for your involvement. The letter should explain that:

  • people are recruited because of their experience of using health or social care services
  • involvement is about consultation and cannot be used to assess capacity for work
  • support measures for mobility and care needs will be provided, as required

Some of the information in the example letter for Jobcentre Plus may be adapted for these purposes.

See the document ‘Liaison with Jobcentre Plus’.

Section 1 - What do we mean by service user involvement in health and social care?

When we talk about service user involvement this may be described as consultation, collaboration, co-production or user control. It may include, for example, giving feedback or advising on a project or service, assisting in its design, or asking other service users for their views.

The term ‘service users’ includes patients, their carers, and potential patients of health and social care services as well as people from organisations that represent people who use services. Sometimes service users are called ‘experts by experience’.

Section 2 - Payment for involvement

It is good practice for organisations to offer to pay you for your involvement. This is one way in which you can be rewarded for the time, skills and expertise that you contribute to service improvements or developments. It helps to support the inclusion of people who might not otherwise be able to contribute, whether for financial or other reasons relating to access. Consequently, it widens the potential pool of people who might influence the shape of public services. When we talk about payment for involvement, we mean payment for your time, skills and expertise. By ‘covering expenses’ we mean either paying for your expenses directly or reimbursing any costs incurred by you whilst you are involved. All out of pocket expenses should be covered.

Involvement and employment

For the most part, we are talking about involvement as distinct from employment in this guide. However, for some people, involvement can be a stepping stone towards employment. If you are offered employment to help improve health or social care services it is absolutely essential that you obtain reliable benefits advice because this could have an adverse impact on your benefits.  

Section 3 – Is there a policy and if so, what is it?

It is good practice for organisations involving service users to have a written policy (document) giving details about their approach to paying people for this. A policy helps to clarify the situation for everyone.

The policy should:

  • set out what expenses will be covered by the organisation
  • set out how much they will be offering to pay for different involvement tasks or activities
    • acknowledge your right to choose whether or not you are paid for your involvement and to ask to be paid a lower amount if benefit conditions set a limit
    • acknowledge benefit conditions that may apply to you and that you must follow
    • provide you with an official letter providing a written explanation of service user involvement to show the Jobcentre
    • explain the procedure for claiming both payment and expenses
      • include contact details for the individual or team who is responsible for administering the payments and resolving any difficulties that may arise.

Section 4 - Payment of expenses

Benefits are not affected by expenses incurred in service user involvement. However, it may be necessary to show evidence of the expenses, should the Jobcentre query the payments. The organization involving you is responsible for producing this evidence, if it is needed.

The organization should cover any reasonable expenses you incur through your involvement. This is to ensure that involvement is equally accessible to people on low incomes and those with health and social care needs or disabilities. The organisation should be able to give you clear written information about their expenses policy on request. If you are not sure whether an expense will be covered check with the organisation in advance.

Organisations often have an upper limit for some expenses. The following expenses may be covered:

  • all travel costs
  • childcare or replacement carer costs
  • costs of a Personal Assistant or Support Worker
  • conference fees
  • administration costs (for example telephone, postage, stationery and other equipment)
  • learning and personal development opportunities.

Payment of expenses in advance or direct to source

It is good practice for an organisation to pay your expenses directly or in advance, where possible, rather than reimbursing you at a later date. Examples of this include: booking travel tickets or accommodation in advance, and paying costs directly to a personal assistant or replacement carer. Paying expenses in this way avoids you being out of pocket before you are reimbursed for the costs incurred. Some organisations can take several weeks to reimburse expenses.

Where reimbursements to a bank account are used, it is good practice for an organisation to:

  • make payments for your time and for your reimbursed expenses separately, with clear, separate references, to avoid confusion.

Section 5 - More information on welfare benefits regulations

 

Rules which differ according to the benefit you receive

People who receive Employment and Support Allowance income-related: Permitted work and completion of PW1 forms

Permitted work rules affect people who are in receipt of Employment and Support Allowance. There are weekly earning limits. People who receive Employment and Support Allowance are required to notify their intention to start paid involvement before it commences. Paid work or paid involvement is called ‘Permitted Work’. A form (PW1) is now provided online and must be downloaded, completed and sent back before involvement starts. However, the Department of Work and Pensions has confirmed that they will accept notification of paid involvement under the ‘Permitted Work’ rules over the telephone, providing it is followed immediately by a completed permitted work form (PW1). People starting ‘service user involvement’ should state this on the PW1 form. People should send the PW1 form by recorded delivery and keep a copy for their records. .

In April 2022, the higher Permitted Work limit was increased to £152 a week (this is usually reviewed in April of each year, when the National Living Wage rate is increased).

The Permitted Work form PW1 is available online from the government website page on Employment and Support Allowance.

People who receive ‘New style Employment and Support Allowance contribution based’ together with Universal Credit for housing costs

People who have fallen ill and cannot continue to work, after a period of employment of about two years or more, may have sufficient NI credits to qualify for contributory Employment and Support Allowance for 12 months. (instead of claiming Universal Credit). This is described as ‘New Style ESA’. However, a person with housing costs of either rent or mortgage interest cannot get these paid as before (by the local authority or through Income Support) but must claim Universal Credit instead. All of the benefit rules and earning limits apply as described above for Employment and Support Allowance. You can follow the same procedures as described above.

However there is now a catch. This is because although you can earn up to £152 a week and your Employment and Support Allowance is not affected, the part of your benefit that is paid by Universal Credit has completely different earning rules. If your earnings are up to the full amount allowed of £152 a week, the Universal Credit monthly payment for the costs of your rent will be reduced.

Your Universal Credit monthly work allowance of £344 is the amount you can receive before your Universal Credit is reduced. So for instance if you earn £100 a week for a calendar month, you will have received £433. (Calendar month = £100 week x 52 divided by 12 months)

Your ESA will not be affected. But your Universal Credit for your rent will be reduced by 55 pence for every £1 over your work allowance of £344 a month.

£433 - £344 = £89 over the work allowance.

£89 x 55% = £48.95 reduction of Universal Credit. OR

If you receive payments for a mortgage interest loan, Universal Credit has a benefit rule that is completely different to all other benefits that applies to payments for your mortgage interest loan. If you earn so much as £1 in a week, your mortgage interest payments will be stopped for 9 months.

This benefit rule means that unless you can pay your mortgage interest through regular earnings (Universal Credit has a £573 monthly work allowance if you do not claim housing costs for a mortgage or rent) you cannot earn any money at all if you need your mortgage interest to be paid.

People who are about to transfer to Universal Credit from Employment and Support Allowance

People who receive Employment and Support Allowance who have permission for Permitted Work earnings of £152 a week should reduce their earnings BEFORE they are transferred to Universal Credit. They should notify the Jobcentre of the reduction. A regulation in Universal Credit may lead to the additional benefit payments for Limited Capacity for Work, or Limited Capacity for Work Related Activity, being either withdrawn or reviewed if their earnings exceed the National Living Wage x 16 hours a week (£9.50 x 16 = £152). The small discrepancy between these amounts indicates that this may be an unintentional oversight but as yet this rule remains.

People who receive Universal Credit

Universal Credit allows some people to earn up to a certain monthly ‘work allowance’ before reductions of the benefit. People can start earning without asking for prior permission. This system should mean that involvement arrangements are easier to manage.

Earnings received should be notified to the Jobcentre before the next Universal Credit payment is due. People notifying earnings from ‘service user involvement’ should state this on Universal Credit online form.

See the guidance below on reimbursed expenses and notional earnings.

Earnings in a calendar month that are in excess of the work allowance will lead to Universal Credit being reduced by 55 pence for every £1 over the work allowance.

You will be eligible for a work allowance if you (and/or your partner) either:

  • have responsibility for a child, and/or
  • have limited capability for work

The Universal Credit monthly work allowances are set at:

  • £344 if your Universal Credit includes your rent. This is shared with a partner if any.
  • £573 if you do not receive Universal Credit for your rent. This is shared with a partner if any.

Please note: Single people and couples without children do not have a work allowance. All earnings will lead to Universal Credit being reduced by 55 pence for every £1 of earnings (for example, earn £100 a month and Universal Credit is reduced by £55).

There is one exception, which applies to people who are in receipt of Universal Credit with a component for a mortgage interest loan. In these instances receipt of any earnings (even £1) will lead to the mortgage interest element of Universal Credit being stopped – this stoppage will be for 39 weeks.

People who receive Carer’s Allowance

Earnings of up to a limit of £132 a week do not affect Carer’s Allowance. Earnings must be reported to the Carers Allowance Unit as soon as possible. Prior permission is not required. However, people who also receive a carer’s premium will have this reduced for every £1 earned over £20 a week. Where people receive Housing Benefit this will be reduced (after the carers premium) by 65 pence for every £1 earned over £20 a week.

People who receive Jobseeker’s Allowance

Earnings of up to £20 a week do not affect Jobseeker’s Allowance if it is received together with Disability Living Allowance or Personal Independence Payment or the recipient is a lone parent. Otherwise, earnings of only £10 a week shared with a partner or £5 a week are disregarded. Earnings over the disregarded amount will result in Jobseeker’s Allowance being reduced £1 for every additional £1 earned.

Prior permission must be obtained from the Work Coach at the Jobcentre before service user involvement starts.

Rules which apply to all benefits

Reimbursed expenses

The benefits rules on ignoring reimbursed expenses for public involvement are consistent across all benefits. People who are in receipt of any benefit will have reimbursed expenses for public involvement ignored – that is, reimbursed expenses will not be seen as earnings and will not affect their benefits, regardless of whether the involvement is in research, service provision or education, or with a charity, the NHS or a local authority. People who are paid for involvement should be provided with a payment slip that shows the amount of reimbursed expenses separately to the payment amount. If expenses are included in a single ‘thank you’ payment, the expenses portion of the payment will not be ignored and the whole payment will be classed as ‘earnings’. For example, a ‘thank you’ payment of £25 that also covers any travel costs will be seen as £25 of earnings and this may affect the person’s welfare benefits entitlements. Reimbursed expenses must exactly match the expenditure.

Notional earnings rule

The notional earnings rule does not apply to public involvement. The notional earnings rule previously stated that any payment offered for involvement would be treated as earnings, whether or not the payment has been accepted. Members of the public now have the option of refusing a payment for involvement, or asking for payment of a lower amount, without it affecting welfare benefits. 

One-off payments

The ruling which once ignored payments made for a single activity during a one-year period has now been withdrawn. Previously, Jobcentre Plus agreed to ignore payments for one-off activities, but this no longer applies. One-off payments are now treated like any other payment.

Use of high street or gift vouchers

High street or gift vouchers are usually treated as earnings, and viewed by the benefits authorities in the same way as other forms of payment. These payments need to be declared in the same way as cash, cheques or bank transfers. However in some circumstances HMRC will treat vouchers as a gift and not subject to NI or tax deductions. In this case the Department for Work and Pensions follows suit and treats the vouchers as a gift that does not affect benefits. The vouchers can be used to obtain goods in supermarkets. An organisation that wishes to be able to provide vouchers for service user involvement that will be treated as gifts should contact their tax office to request a ruling. Low amounts such as a £30 voucher will be more likely to be agreed.

Averaging Rule

An averaging rule may be applied to payments that are above an individual’s weekly earnings limit (if the welfare benefit they receive has this condition), so that it is ‘averaged’ over a longer period of time. Jobcentre Plus may apply this rule where there is a cycle of work or public involvement (e.g. every two weeks) or where the employer pays monthly or quarterly in arrears. For example, where the employer pays monthly in arrears someone receiving a benefit with a weekly earnings limit of £20 may be offered £80 for two involvement activities, and may be able to accept it if they request that it be averaged over four-week period, which would mean they have weekly earnings of £20, within their earnings limit. This only applies to payments for at least two activities within the averaged period. One of these activities could include preparation in advance of a meeting. The averaging rule should be requested in advance of the involvement and before any agreement to claim payment.

Section 6 - Questions to ask the organisation involving you

  • does the organisation have a payments policy? If so, can you have a copy?
  • how much is the organisation offering to pay you – and for what involvement activities?
  • how much time do they expect this involvement to take up?
  • will the organisation pay your expenses? If so, which expenses will they cover?
  • what expenses can they pay directly or in advance, for example travel tickets, accommodation?
    • does the organisation have access to any local or specialist sources of advice and information on payment related issues?

Acknowledgement and further information

This information has been provided by Judy Scott, independent consultant.

Further information is available at Payment for Public Involvement in Health and Care Research: A guide for organisations on determining the most appropriate payment approach | NIHR

https://www.nihr.ac.uk/documents/Payment-for-Public-Involvement-in-Health-and-Care-Research-A-guide-for-organisations-on-determining-the-most-appropriate-payment-approach/30838

July 2022