Can A Company Director Claim Benefits?
By
HuutiMoney
The purpose of this blog post is to help its readers in answering the question of whether or not a company director can claim benefits. To discuss this topic with a holistic view, we will explore the benefits that a company director can claim, their eligibility criteria and the application process.
Can A Company Director Claim Benefits?
Yes, a company director can claim benefits as long as they meet the eligibility criteria for the benefit(s) they intend to claim.
If you are the sole director of a company, you should also be prepared that the company’s income will be jointly accounted for along with your income during a means test for a benefits claim. However, the assets of the company are disregarded from the applicant’s capital during the means test.
Therefore, a company director can claim benefits that they qualify for; however, they will have to declare the books of accounts of the company and be ready for the company’s profits (or losses) to be added to their personal income (this includes any other source as well).
Wages or dividends received through the company’s trading activities by the company director stand to be disregarded during a means test to claim benefits.
When it comes to the assets of the company or the value of its shares, those are completely disregarded from the means test conducted to confirm the qualifying eligibility of the company director to receive welfare benefits.
If you are a company director who finds themselves on a low income and needs to claim welfare benefits, your first option may be to apply for Universal Credit.
Under certain peculiar circumstances such as your business not being operational or if you are out of work for certain times of the year, despite being a company director you qualify for Jobseeker’s Allowance. You would still be required to meet the eligibility criteria and agree to the terms of the Claimant Commitment offered by the DWP.
In the case of JSA, however, the dividends you receive as a company director will be included in your capital; which should remain below £16,000 for you to be eligible for the benefit.
If you are a company director with a severe health condition or a disability, you can claim disability benefits such as Personal Independence Payment or Attendance Allowance.
How Much Can A Company Director Claim With Universal Credit?
The amount that you can claim with Universal Credit will depend on your:
- ability to qualify
- income and savings
- circumstances
In the case of Universal Credit, you can be eligible to claim the benefit if you are older than 18 years of age and have income or savings below £16,000. The amount that you can claim will vary based on your age, marital status and if you have a child or not.
For instance;
- you can claim £265.31 per month if you are single and under 25 years of age
- if you are single but older than 25, you can claim £334.91on a monthly basis
- if you are part of a couple and both of you are younger than 25, you can make a joint claim of £416.45 per month
- if you are a couple and you are older than 25 years, you will be eligible for a monthly payment of £525.72
If you have a child or even children, you will be able to claim an additional amount on top of this basic rate. This is called the child element and what be classified as follows:
- if your first child was born before 6 April 2017, you will get an additional amount of £290 per month
- if your first child was born on or after 6 April 2017, you will get £244.58 added to your Universal Credit payment
- for your second child onwards, you can claim £244.58 per child in addition to your basic Universal Credit claim
How Much Can A Company Director Claim With Jobseeker’s Allowance?
The amount that you can claim with a Jobseeker’s Allowance will depend on your age and circumstances. This means that:
- if you are between 18-24 years of age, you will receive £57.90
- if you are older than 25 years of age, you will receive £73.10
- if you are a couple and both of you are older than 18 years of age, you can claim £114.85
You can be considered eligible for (new style) Job Seekers Allowance if you have made the required number of Class 1 contributions towards National Insurance for the past two tax years.
To apply for (new style) Jobseeker’s Allowance, you can submit your claim online. The Jobcentre Plus office will contact you within 2 days asking you to come to their office for an interview to proceed with your application.
Can A Company Director Claim Disability Benefits?
Yes, a company director can claim disability benefits such as Personal Independence Payment or Attendance Allowance if they meet the eligibility criteria for each one separately.
To claim PIP, the applicant should be aged 16 years or above, have a long-term physical or mental health condition or disability and face difficulty doing certain routine tasks or moving around. The difficulties faced by the claimant should be expected to last for at least 12 months from the day they started.
To apply for PIP, you can call the PIP helpline at Telephone: 0800 917 2222 or send a letter to PIP Personal Independence Payment New Claims, Post Handling Site B, Wolverhampton, WV99 1AH to ask for the application form.
While it may take a few weeks until your form is processed and a healthcare professional visits you for an assessment. Once the process is complete and your claim is approved, payments will be made every 4 weeks.
Based on your condition, you can expect to claim PIP payments according to the following details;
- if you are claiming the Daily Living Part, you will be paid between £61.85 and £92.40
- if you are claiming Mobility Part, you will get between £24.45 and £64.50
Meanwhile, in the case of Attendance Allowance, you will be evaluated on the following grounds:
- whether or not you have a physical or a mental disability (including learning difficulties)
- the severity of your disability is such that you need help caring for yourself or you need someone to supervise you
- you have required support for at least 6 months
The amount that you can claim for Attendance Allowance will vary as follows:
- you will receive the lower rate of £61.85 if you require frequent help or regular supervision during the day, or to be looked after at night
- you can claim the higher rate of £92.40 if you need supervision throughout the day and night
Conclusion:
The discussion in the above article highlights that whether or not someone is a company director does not affect their eligibility to qualify for welfare benefits as long as they meet the eligibility criteria for each welfare benefit separately.
References:
Contractor Doctor: Can I claim Jobseeker’s Allowance if I have a limited company?