I got further advice from Citizens Advice. They sent the query off to the people they get advice from (relevant bit pasted below):
ESA
As you have referenced the question for ESA is whether the client ‘works’, and if so whether the earnings from that work are above the permitted work limit. The first question what the client would actually be doing. That would answer the question of whether the nature of any ‘work’ is so trivial that it can arguably be disregarded as not work at all.
Footnote 108 on p1003 in Ch 45 section 4 covers this possibility and references two cases. The second (which is here: https://administrativeappeals.decisions.tribunals.gov.uk/Aspx/view.aspx?id=2578) is probably the most helpful. It review authority as to when the ‘de minimis’ principle means something isn’t ‘work’ at all. Whilst it related to incapacity benefit, the law for ESA is set out in a similar way.
The DWP’s guidance in relation to negligible work and self-employment is at para V3021 here: https://assets.publishing.service.gov.uk/media/65645aea1fd90c000dac3bc2/admv3.pdf. This seems obviously more relevant as the client isn’t considering helping out with someone else’s Air BnB rental.
All of this indicates that it is a question of fact. That is obviously going to be very hard to answer when the client hasn’t yet started renting out the property, much less finalised what she is doing in relation to that. On the one hand she seems to plan to get other people to do the physical cleaning (more like a landlord than someone running a business). But on the other, organising that cleaning might be seen by the DWP as something that ‘contributes materially to the running of the business or involves a significant amount of supervisory or administrative work’ (to quote their guidance).
I think it is arguable that someone who rents out a property through AirBnB is not ‘working’ (and that argument is stronger the less involvement the client has in the process of getting money for it). But I don’t think that it is as certain as the forums have made it sound.
Even if it is ‘work’ then the further question is whether the client earns enough to be over the limits, as you said in your reply. That would presumably be the profits of renting the home, after paying for any cleaning services, registration fees, etc.
The final question is whether setting this arrangement up (I’m guessing that organising the repairs and registering a short-term let of itself will involve a lot of effort and organisation) implies that the client no longer passes the test to be in the support group, as what she can now manage means that the effects of her condition have improved. That is a completely separate question – it doesn’t matter if the change is shown by work, a hobby, renovating her home with no intention to make money from it or anything else. It is just about how her condition affects her.
