Amending Self Employed Earnings

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    When do you amend self employed earnings from when new accounts have been provided for the previous year?

    I accept that we would not normally go back and re-assess the previous period but how would you establish the effective date of the change?

    The accounts are for the previous year but if they are being prepared by an accountant it may be some months before they have been done and then passed to us.

    When do the new accounts then apply from?


    There is a hole in the D&A Regs here. Strictly speaking there is no ground for supersession unless the claimant has had a sharp-edged change of circs from an identifiable date. But it is clearly a nonsense to be stuck for ever more with the very first self-employed assessment that you ever did. So what can you do? Possible ways around it:

    – the next time you have to make a decision on that claim for any reason, like a rent increase or the annual uprating, update your self-employed earnings estimate at the same time as part of that superseding decision, from the same date

    – fudge it by saying there is a change of circumstance in that on a particular date it is no longer safe for you to rely on an income estimate that was made 12 months ago. A bit feeble, but it’s the best you’ve got.

    A couple of months ago on here I think I suggested a form of words for a new paragraph in D&A Reg 7 which caused a lot of you some amusement, so I won’t try again. But it does need a new paragraph to cater for periodic updates of estimated income.


    Thanks for your reply.

    Do you think the following would be basis on which I could justify amending the earnings from the Monday following 52 weeks of entitlement ?

    Extract from Regs:
    30. Average weekly earnings of self-employed earners

    (1) Where a claimant´s income consists of earnings from employment as a self-employed earner his average weekly earnings shall be estimated by reference to his earnings from that employment over such period as is appropriate in order that his average weekly earnings may be estimated accurately but the length of the period [b:3086a87d05]shall not in any case exceed a year. [/b:3086a87d05]


    Well it’s a start. The trouble is that Reg only deals with the period of past activity that you use as the basis of your estimate – it only implies that you should use it for a year’s worth of benefit, and even then the absence of a supersession ground is a problem.

    Likewise, the Reg that says you should use five weeks/two months to work out average earnings does not say that you should make a fresh estimate after 5 weeks/two months (and I’d be surprised of anyone does – most Councils will take an estimate from those periods and then run with it for a few months at least).

    All unsatisfyingly vague!


    We review these claims annually at the end of the accounting period, on the basis that all S/E earnings cases are, at the best estimates and we are revising our estimate based on new information i.e. new set of accounts


    I have struggled with this for some time.

    We instigate an intervention, either postal or visit around the time that the accounts end, then if the claimant does not have new accounts we ask them to complete the form found in the Security Manual appendix 9 on the basis that it is their responsibility to supply details of their income to support their award.

    I asked the DWP for some advise, see below:

    Strictly, there was nothing to prevent a claimant asking for a supersecession of a decision on the grounds that his self employed earnings had altered. That has not changed. Reg 23 HBR allows you to decide what period (up to a year) to use in estimating a claimant’s self employed earnings. Reg 66 then allowed you to set a suitable benefit period. This provision is now covered by your interventions.

    There is nothing to stop you deciding at some point into a benefit award that you wish to look at self employed earnings again. Reg 7 of DMA allows you to supersede a decision where a change of circumstances is anticipated; for example, the claimant may employ people and be planning to lay some of them off due to business problems.

    Would you have to consider a supersession each time the claimant asks for one? Strictly, yes, you have to consider it. You don’t have to do it. Commissioner Powell’s decision CH/329/2003 may help illustrate this point. I think you have to apply a test of reasonableness. To refer to Commissioner Powell’s example, if a roofer cannot work for two weeks due to rain, it may not be reasonable to supersede your decision. If he has to employ some one else for six weeks, because he cannot work after falling of a roof, you may consider it reasonable to supersede.


    Thanks for your comments.

    If you use interventions and find out from the intervention that there has been a change, what effective date do you use to amend the income from?


    That’s where the D&A Regs are silent Jayne-T.

    The best I can suggest is that you say:

    (i) – the last payment issued before the intervention date represents the last payment you consider it safe to make on your previous income estimate
    (ii) – you have now updated your income estimate, and you consider it safe to use that for the next few months, or a year or so
    (iii) – there has been a change of circumstance from the intervention date in that a new income estimate appeals to you more than the previous one did as from that date
    (iv) – you make a superseding decision under Regt 7(2)(a) and 8(3) from the Monday after the intervention date

    As I say, the D&A Regs don’t really give you a clear ground for supersession for the sole reason that you think it is about time you saw another set of accounts. So you have to contrive a clear change of circs on a certain date to hang the supersession on.

    If there has been a clear change of circs of the kind described in the DWP email above that is another matter – there will be a real-life date for such changes and they can be picked up as and when they happened, subject of course to the one-month rule.


    Date of change? That is always a bit tricky.

    If the change can be attributed to a change such as number of hours worked, an increase in charge for work done or something similar then we can use that date.

    If it is just a change in the overal average first we look at when the financial year of the person ended and if it can be linked to that or failing that then we take it from the date the intervention form is received on the basis that a supersession is being requested by virtue of new infromation being submitted.

    This approach has never felt entirely satisfactory which is why we try to ensure that all of our self employed are issued with an intervention form around the date of their financial year end.

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