Paul Clayton: An actor’s guide to financial support
When I started acting in the late 1970s, I was lucky enough that the state welfare system acted as a safeguard for my periods out of work. It was hardly questioned by young actors leaving drama school in those days that we would sign on and exist on unemployment benefit while waiting for a job – a sort of government subisdy of the arts. These days the situation is incredibly different. Unemployment benefit claims are time-limited, and after a short period of time you can be asked to attend interviews for jobs not of your choice. You can be asked to retrain, which is hard for anyone who has only recently emerged into the world of work.
I declared myself self-employed in 1998 and haven’t claimed any sort of benefit ever since. At times it’s been hard, but it has pushed me forward to find work in all sorts and at all times. An important part of allowing yourself to become a working actor is allowing yourself time to breathe, and there are times when the benefits system can do this for you. I’m a great believer in the mantra that busy hands are happy hands, and the ability to find a job that uses your skills and provides you with financial support during the periods when you’re not acting is far more worthwhile to you as a person than to try and subsist on measly state benefits.
But benefits can underpin your financial situation. In many instances they are an entitlement, and while they remain so, I think they should be claimed. The whole benefit scenario is a nightmare to negotiate, and one where I would certainly need specialist advice. I asked Alan Lean, the benefits and tax specialist at Equity, to describe the minefield that is the benefit system. He was immeasurably helpful and went into great detail on the subject. For Equity members, he is at the end of a phone, but for those of you who may not be, here are the broad outlines of the situation that deals with actors.
The business of claiming welfare benefit is something that is becoming increasingly fraught with difficulty in a changing welfare-reform landscape – nonetheless state benefits can still operate as a valuable safety net for actors during periods of low work activity. This is a broad view of the type of benefits that can be claimed, some of the issues involved in claiming them, and some future changes in the pipeline.
Jobseeker’s Allowance for actors
A key benefit for actors is Jobseeker’s Allowance (JSA) which exists in two forms: contribution-based (CBJSA) and income-based (IBJSA). This is a benefit for those either not working or working less than 16 hours per week. The contribution-based version, as the name suggests, is dependent on having paid sufficient Class 1 National Insurance contributions (NICs) in the two tax years prior to the year of claim; so, if you were to claim in January 2016, you would be assessed on tax years 2013/2014 and 2014/2015.
Until 6th April 2014, many actors were paying Class 1 NICs on Equity contracts or similar, and so were accumulating entitlement to CBJSA. As from 6th April 2014 actors are now liable to pay Class 2 and Class 4 NICs on those contracts. This results in a loss of entitlement to CBJSA and thereafter you would not qualify unless you have a separate PAYE job, paying sufficient in Class 1s.
It is important to appreciate that, even if you have sufficient National Insurance contributions, the DWP would still need to assess your self-employed income, but with CBJSA it is only your earnings that are taken into account – savings are ignored. If you are claiming IBJSA, any other income from your household needs to be taken into account, eg. income of a spouse or partner, which may prevent you getting any benefit. Any payments received for work during a claim should be notified to the Jobcentre, and when signing on actors should tell the DWP about any work in the pipeline. This helps to avoid benefit suspensions or overpayments.
When you sign on at a Jobcentre you need to sign a Jobseeker’s Agreement. You would certainly want acting to be the principal activity on your work search. You should be allowed to look for this kind of work for the first three months of your claim. Following this, the DWP can insist that you add at least two other work-search activities. You can argue that at least one of these should be related to acting or compatible with going to auditions and other such activities. Those who stay on JSA for a period in excess of three months may find that they are asked to undertake training courses or mandatory work activities.
Following a recent case, any claimant sent on one of these Back to Work schemes should have received sufficient information about the objectives of the scheme, who it is aimed at and what alternative schemes are available. Failure to provide this information could make participation in such a scheme ineffective. If you think you need to challenge your participation in such a scheme, you should seek advice. This is where Equity can be one great source of help, as failure to participate in the scheme may result in non-payment of benefit.
Housing Benefit for actors
Another benefit that many actors have claimed historically is housing benefit – at present, this can be claimed without also having to claim Jobseeker’s Allowance, although this option will disappear when Universal Credit comes in (see below). Housing Benefit can be claimed if you are working and on a low income. The level of benefit can vary greatly as it will be based on the local authority’s assessment of market rent for where you live. Thus you need to bear in mind that there may be a considerable shortfall in what Housing Benefit will cover. If you receive income-based Jobseeker’s Allowance, then no income assessment is necessary for Housing Benefit.
Both JSA and Housing Benefit should look at your net profit from acting work, but you need to remember that certain expenses will not be allowable as they would be under the tax system – particularly items such as capital expenditure and depreciation. Make sure when claiming benefits that the DWP is using your net profit figures.
When you claim Housing Benefit, you should also claim under your local council’s Council Tax Reduction scheme. These schemes have replaced Council Tax Benefit and the details vary from one council to another. You should look on your local council’s website to find details of their scheme and how to claim.
Working Tax Credit for actors
Another benefit actors can claim when working is Working Tax Credit (WTC) – a means-tested and tax-free payment for those in relatively low-paid work. You qualify if you are 25 or over and working 30 or more hours a week; alternatively, you need to be at least 16 years old and working 16 or more hours per week, with either a dependent child or a disability, or you are aged 60-plus. The main problem from the actor’s perspective is the 30-hour requirement, although you can include the time you spend on activities necessary to your self-employment, such as bookkeeping and research work. A further complication is that you may find HMRC looking further into your claim if they think you are not running your business on a commercial basis, eg. if your average hourly profit from your self-employment is less than the National Minimum Wage (£6.50 per hour from October 2015). Nonetheless, it may be worth claiming WTC during, for example, a theatre run which is relatively low-paid.
Employment Support Allowance for actors
It is important to appreciate that state benefits are available to the self-employed when you are sick. The main benefit, which replaced Incapacity Benefit, is Employment Support Allowance. It is limited to a 12-month period. For the first 13 weeks, your claim cam be supported by a medical certificate. After that you would need a medical exam to continue to claim. There are often huge backlogs with these medicals, currently carried out by an outsourced private sector company called Maximus.
Maternity Allowance for actors
One other benefit worth mentioning is Maternity Allowance, which can be claimed by self-employed workers who are expecting a child – it can be claimed for a period of up to 39 weeks at any time from 11 weeks before the expected date of childbirth.
Universal Credit for actors
On the horizon looms Universal Credit, the brainchild of Iain Duncan Smith, which is currently well behind schedule in its implementation. It appears that the self-employed will be fully included from 2017. This represents a highly significant reform to the welfare system, in that one benefit will replace a whole series of means-tested benefits – Child Tax Credit, Working Tax Credit, Housing Benefit, IRESA, IBJSA and Income Support. Universal Credit will incorporate elements which previously represented separate benefits, eg. a housing element, children element, and so on. There will be greater flexibility in terms of hours worked and more generous income disregards (amounts of earnings ignored before impacting on benefits received), and for some actors it will provide a valuable support even during periods of work. Contribution-based benefits such as CBJSA will continue and are not affected by Universal Credit.
Despite the fact that there are some positive features of Universal Credit, at the time of writing there are two in particular that are causing concern not just for actors but also for other self-employed groups – something called the Minimum Income Floor and the concept of ‘gainful self-employment’. Both of these are highly problematic for the self-employed – the Minimum Income Floor assumes a level of earnings from self-employment, in a straightforward case, equal to the national minimum wage multiplied by 35, which would equate, as from October 2015, to an annual figure of £11,830.
Any award would therefore assume this level of income as a minimum, irrespective of your actual income.
This floor applies if you are viewed as ‘gainfully self-employed’, ie. carrying on a trade, profession or vocation as your main employment which is “organised, developed and regular and carried on in expectation of profit” and the earnings obtained are self-employed earnings. Situations may occur where actors are viewed as self-employed but assumed to have more income than they actually do, or are not viewed as gainfully self-employed and consequently may be coerced into looking for any full-time work and heavily sanctioned if they fail to comply.
Equity is in ongoing discussions with the DWP and is working with other stakeholders to try to ensure that the new Universal Credit rules will be applied fairly and intelligently to its members.
It is important for actors to realise that there are mechanisms available to challenge DWP decisions – if you request that a decision be looked at again, there is now a new system which applies to many benefits. This results in the DWP issuing a decision on your claim, and Equity has noted a sharp drop in appeals following such reconsiderations. It is therefore very important to seek advice when problems with benefits, or decisions which you consider to be incorrect, occur.
For Equity members, Equity runs an Advice and Rights Helpline, which gives advice on tax, National Insurance and welfare-benefits issues. This is open on Mondays and Thursdays from 10:00–13:00 and 14:00–17:00 on 020 7670 0223, or you can email firstname.lastname@example.org
General information on all the benefits mentioned above can be found at the following links:
I’m incredibly grateful to Alan Lean for such a comprehensive overview of what is available. This also gives a really practical example of the benefits of joining Equity.
This is an extract from The Working Actor: The Essential Guide to a Successful Career by Paul Clayton, £12.99 paperback, published May 5, 2016 by Nick Hern Books