Morning all! I hope somebody has the experience/knowledge to be able to answer this question. (Please reply with links to any helpful web pages, etc.)
In a nutshell, it's about whether I have infringed benefits regulations by claiming ESA whilst having a workplace pension fund, and also whether I can use my pension fund to pay off overpaid benefits.
My story is a bit complicated - please bear with me. (TLDR: see my questions at the end of this post)
Since 2007 I (male, 41) have been out of work, in the UK, claiming benefits due to ongoing illness. In 2014 I became well enough to start working under the Permitted Work scheme, which allowed me to pay myself £101 per week whilst also claiming weekly Employment and Support allowance (ESA). (I had been placed in the Work-Related Activity Group following my Work Capability Assessment.) I also received Housing Benefit and Council Tax Benefit. I am not eligible for DLA/PIP.
I went self-employed, selling secondhand goods, renting storage space for my stock, etc.
Due to a misunderstanding on my part (and some pretty lousy government policy), I have now been requested to pay back approx 9 months of ESA as I was earning too much from my business (more than £101 per week after expenses). The law in this area is a nightmare for the self-employed, but the long and the short is that I have appealed at First Tier Tribunal and got nowhere, so I will be needing to pay back just over £4,000, even though the amount of my alleged excess earnings in that period is no more than about £1,200.
(FYI: Under Permitted Work law, if you exceed the Permitted Earnings by even £1, you can be required to pay back the WHOLE AMOUNT of ESA received whilst doing Permitted Work. Which is what has happened to me. At least the tribunal cleared me of any wrongdoing, saving me a whole £50.00 in civil penalties!) :T
I also have an outstanding (and overdue) tax bill of just over £500, so we are looking at £4,600 in total.
I have nothing in the bank right now and business is very patchy, so quite often I am struggling to keep my business bills paid and my car on the road. (Fortunately I can't lose the roof over my head as my parents have very kindly taken me in, rent-free, while I get back on my feet.) My health is still an issue, so doing extra work is out of the question (I'm already working to the max), and I don't feel well enough to work for an employer, even part time. I can only really work if I can pick and choose my own hours.
I am reluctant to start claiming in-work benefits (tax credits/whatever) as this puts me back in the position of having to repay if I earn too much. It's one thing if you get paid by the hour, but different if you're selling stuff and trying to grow a business.
Here's some good news and possible light at the end of the tunnel: I have a small workplace pension fund from my old job in Germany, where I was working before I got ill. I think this fund was worth about £14,000 the last time I received a statement.
German pension law allows one to redeem the capital value of one's pension if one leaves the country to live elsewhere. Assuming I can still do this, obviously the answer to my financial problems would appear to be to liquidate my pension fund, bring all those euros back to the UK as £sterling (never mind the cost of currency exchange!), and use them to pay off my debts. (And then hopefully use any surplus to boost my business.)
The obvious alternatives would be to try to pay a minimum amount back to the Government each week or to declare bankruptcy. (I really don't want to declare bankruptcy as it costs money to do so; I have hardly any assets; my CD collection is worth far more to me than it is to anyone else; and a visit from the bailiffs would upset my Mum.)
So (finally!) my questions:
1.) Have I done the wrong thing by claiming ESA/Permitted Work whilst having a workplace pension fund? (I have never seen anything on the benefits web pages that said I would have to cash in a pension or declare its existence before being able to claim benefits. However, I have learned from bad experience that many of those web pages were clearly written without much thought for the end users.)
2.) If I have done wrong, what happens next?
3.) Can I cash in my pension and pay off my debts without triggering some kind of demand from the DWP to pay back even more of the benefits I have claimed whilst out of work?
4.) Are there any other (sensible!) options I haven't thought of for dealing with my debt?
I'm trying to do the right thing by getting back on my feet and working to the best of my ability, but it has all got a bit out of hand!
If anybody can point me to the law on this subject, web pages, etc. then that would be even more useful.
Many thanks - over to you!!
