A common question that contractors have is what they are allowed to do in terms of claiming benefits when they are not in the middle of a job. Technically if you do not have a contract in place you could claim unemployment benefits but it is a dangerous area for contractors as they are never sure when the next employment will start and finish.
Claiming Job Seekers Allowance
You can claim job-seekers allowance (JSA) as long as you are registered as unemployed or working under 16 hours a week on average and are below the pension age. However, another requirement is that you are available for employment and are actively searching for it, which contractors can do simply by making their intentions to obtain a contract clear.
So on the outset claiming job-seekers allowance is an easy way of earning an extra bit of money each week in between trades. The problem contractors face is the potentially frequent signing on and signing off every time they start/finish a project.
Another government benefit is disability benefits. Disability benefits are given to individuals who are suffering from a severe health problem or disability, paid for by the British government out of your National Insurance contributions. Some contractors may be claiming DLA (Disability Living Allowance) which not only doesn’t affect their ability to work but it can actually lead to tax advantages when it comes to paying income tax.
If you wish to claim this extra Working Tax Credit you are required to be working a minimum of 16 hours per week, have a disability that makes getting to your place of work a difficult process and you must be already receiving DLA or a similar disability allowance. This can be as much as £71 a week in additional benefits alongside your work although this does depend on different factors so it is important you do your research and ensure that you find out what you are entitled to before contacting the HMRC. You can view the terms and eligibility requirements for additional Working Tax Credit on the HMRC’s website.
Check Before you Claim
If you are unsure as to whether or not your work as a contractor conflicts with the governments policies on a certain form of government-provided benefits, you can quickly find out by either calling them directly, visiting your local office or even just a search of their website.
You don’t want to be caught out claiming benefits illegally as this is a criminal offence, so make sure you do the research before you claim.