HOW TO BE UNEMPLOYED A FREELANCE’S GUIDE TO THE BENEFITS SYSTEM |
By Tim Potter |
There is a common misconception that as a freelance you cannot claim unemployment type benefits. Yes, the rules are more restrictive but there are ways to do it (and they are legal). The traditional “dole” (now called ‘Contribution-based Jobseeker’s Allowance’) is based on you paying the minimum amount of Class 1 National Insurance in the previous tax year. It is really only open to people who were freelance but on PAYE in the previous year. If you find yourself in this position then claiming is relatively straightforward for the first six months of unemployment. After that, the system joins another one – ‘Means Tested Benefits’. |
For the rest of the freelance population, ‘Means Tested Benefits’ is the only way to go. If you can show that you are poor enough to pass the test criteria then you may get some or all of the benefits on offer (this used to be called Social Security is now known as ‘Income-based Jobseeker’s Allowance’). They will need to know that you have finished your last contract and do not have another one to go on to. You must be actively looking for new contracts - easy for most of us as it is our natural state of life. |
Once you are ‘signed-on’, they will usually ask you to detail at least three things you have done each week to look for work. Phoning a client or an answering service, sending a CV, searching the Internet or even attending an industry networking event (party!) all count as looking for work. After 13 weeks you will need to expand the range of job types that you look for and the geographical area you are considering, but anything peripheral to our industry will count. |
After six months you are required to accept anything, but you might also be steered towards ‘re-training’. This can be a good way to get them to pay for the courses you always thought might do you good but could not afford. |
The Basic Means Tested ‘Job Seekers Allowance’ for a single person is £60.50 per week. This rises for couples (£94.95 per week) and for dependent children. For the poorest of us this can be paid in full. If you go beyond some of their criteria, the amount is reduced in stages until they think you are of sufficient means not to need State help. |
If your savings are less than £6,000 then there is no effect. Between £6,000 and £16,000 there is a sliding scale of reductions to your benefits. Beyond £16,000 savings, sorry you’re too rich! Do note that you cannot off-set debts against your savings, so you may need to think whether it might be worth paying off more than you might otherwise consider, so that any effect on your benefits is reduced. |
Any other sources of income are taken into consideration. If you have money owed from previous jobs, tax rebates or insurance claims, you may need to rearrange your finances or delay the date you sign-on to avoid unfortunate reductions to your claim. While other dependent members of your family can increase the level of benefit, anything they earn or have saved or expect to receive will be taken into account (working more than 24 hours a week seems to be a cut-off point). |
In addition to this you may be able to claim some of the other benefits on offer like Council Tax Benefit, Housing Benefit or Mortgage interest relief. |
Council Tax Benefit reduces your council payments to zero. If you rent your home then the council will pay Housing Benefit (which pays your rent up to limits set by Local Housing Allowance rules) or if you are a home owner Mortgage interest relief kicks in after 3 months (2 months if your mortgage began before 2nd October 1995) and pays some or all of the interest portion of your premiums. (See websites below for exact restrictions and rules) |
The full details of these benefits and their eligibilities are set out on websites like: |
None of these benefits are enough to live on, but they will do a little bit towards helping you to stay in the business during the extended industry down turns like the one we are suffering at present. |
Remember, if you find yourself in financial difficulty, then BECTU can help with advice and point you in the right direction for benefits and debt counseling. |
Tim |
| did you know about ... workline uk |
WORKLINE UK. This is an organisation that provides free employment advice for people working in the UK film and television industries |
(T) 0870 850 7147 |
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Second AC – Emma Edwards and First AC – Shirley Schumacher
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