Universal Credits - Self Employed

coffeelover65

Universal Credit won't be paid where the household (cust and partner) have savings over £16K, so I'm not sure what would happen in your case when its time to move across to UC.

[Deleted User]

Sorry I don't have any savings over 16K, just earn a lot over 16K from employment. :-)

chinagirl

What about my family situation??

I work 28 hours earning approx 14,000 pa.
My DH is s/emp doing a Gardening/home maintenance business, sole trader, but this year's record rainfall has flattened any demand for his work, and it has been dwindling to almost nothing . He does a handful of regular old ladies garden tidies, and occasionally gets larger fencing job which is more lucrative.
He could throw in the towel, and claim JSA, but there would be NO point, as I work over 24 hours and because he has been s/employed, he has not been paying a Class 1 N.I. stamp, so would be assessed for Income Based JSA, and would be NILLED.
So we continue as we are, with him scrabbling round trying to earn the odd £20 here and there cutting grass, trimming back hedges etc. He is always on the look-out for a warehouse style job too, but has not had any success there either. Obviously he is capable of looking for work without the might of Jobcentre Advisers urging him to do so.
We thankfully manage on my wage plus Tax Credits, but will obviously be the loosers when UC comes in and we get transferred accross.
My DH is also looking into doing alternative s/empl work which would be a bit less weather dependant, eg delivering parcels in his own van, but we are still waiting to see if this would be feasible in our area.

What do you think??

coffeelover65

Hi Chinagirl,

I'm not sure how its going to work with couples where one is SE, at a meeting today re UC nearly every question we had was met with "the DWP haven't confirmed that yet" so its really just guess work.

From the draft regulations at the minute (this is for a single person), where somebody is working (employee or SE), the government are going to be expecting them to be earning at least the minimum wage for a 35 hour week (216.65). With people who are employees, the DWP draft is saying they expect people to look for an additional job, ask for extra hours, or "negotiate" with their employer to increase their hourly rate. I have no idea what they'd expect the SE to do to increase their income.

I was also told today that the bigger the authority you live in, the later in the process you will be moved across. For example, Birmingham will be the last area where people will be moved across as its the largest city outside London, as they want to move people from the smallest authorities first as they have the smallest case load.

samasama

coffeelover65 wrote: »

From the draft regulations at the minute (this is for a single person), where somebody is working (employee or SE), the government are going to be expecting them to be earning at least the minimum wage for a 35 hour week (216.65).

What this doesn't take into consideration is that sometimes self-employment hours aren't actually paid - for instance if I am driving to see a customer or buying essentials from a wholesaler, or spend a couple of hours designing/printing advertising materials I can't charge anyone for that. It's all working hours though. If I was employed I'd get paid for my time and even paid a mileage allowance!!!!! Also - what about holiday/sickness time, an employee is allowed those so will a self-employed person be able to claim those (even though we won't actually earn anything) or are we supposed to work 40hrs a week, 52 weeks a year.

And yes - it's 40hrs a week not 35hrs that makes a full-time job. It was stated by one of the 'experts' (not sure who - might have been a DWP/HMRC person or one of the other guests) on Martin Lewis's MoneyBox Live a couple of weeks ago in direct answer to this issue.

Also - is there any news yet on how self-employed single parents will be treated - will the UC rules be the same as tax credits (thereby meaning I can be self-employed for 24hrs a week and not be penalised?).

Surely part time work (whether self-employed or employed) should be encouraged and more focus should be turned to those who are full-time unemployed.

For those replying to this thread who have never been self-employed, remember it's not an easy option. Most self-employed people have a better work ethic, tons more motivation and drive and are less likely to be off sick (do you think anyone in employment would be back at their desk 2 days after dislocating their hip?). Luxuries like holiday pay and sick pay don't exist! Unfortunately work is not guaranteed (especially in a long recession) - we don't get paid for just turning up at the office and saying "oh there's no work, let's have a coffee". Perhaps we should all give up now and just sign on!


Don't forget, some people are too ill to work full-time, but not ill enough to claim ESA. How are they supposed to cope with being forced to apply for full-time work?

MissMoneypenny

dktreesea wrote: »

But I also note, while the government has said "Where, in any assessment period, a claimant is in gainful self-employment and their earned income in respect of that period is below £... [amount/s to be determined], the claimant is assumed to have earned income equal to that amount", they also say transitional protection will "not be offered to self-employed claimants against the effects of the Minimum Income Floor. In these cases, the Transitional Protection calculation will be carried out prior to the Minimum Income Floor being applied. Once the Minimum Income Floor is applied the household will retain their Transitional Protection amount, but no further protection will be provided. This will ensure that claimants' circumstances other than those related to earnings are protected. "

That sounds to me like if you would be entitled to, say, £400 a week under the current benefits regime, but, with the minimum floor applied, this would drop to £200 a week, assuming everything else remains the same, and provided you have a genuine business ,you would continue to get £400 a week right up to the end of the transition period, (2017?)

I don't read it as you have. Perhaps IQ could give her readings on that?

I read it as (in your example) the £200 is protected (because of the bit I embolded above in your quote), but no transitional protection is offered on their self employed earnings, because they did not meet the minimum amount they had to earn before they went on to Universal Credit.

As stated in your quote above, "transitional protection will not be offered to self-employed claimants against the effects of the Minimum Income Floor".' i.e - the days of saying you work long hours but earn less than the NMW (or more than NMW if the government decide someone doing that job should earn x per hour) and want benefits to make-up your wages, will end when the claimant goes onto Universal Credit; as there is no transitional protection for that part of the move onto UC.

The government want to close the loophole of self employed people claiming their wages from welfare, as it's being abused.

coffeelover65

@samasama,

The points you're raising are valid, but the whole point of UC is to simplify the rules of 6 different benefits into 1 scheme so some people are really going to lose out. Pretty much every change coming in from April 2013 will hit the youngsters the hardest (anybody under 25 receives less in benefits than other age groups), and also the self employed.

The reason why the government is been so rigid with the SE workers seems to be due to the abuse of the system by so many people currently which can't be protected against. For example, you have a mobile hairdresser who works exactly 16 or 30 hours a week, every week, but year after year, never makes enough money to pay NI or Tax, and is in effect earning less than the minimum wage. Without tax credits, Housing Benefit, Council Tax Benefit etc, any normal person would seek alternative employment.

I didnt catch the moneybox show and not heard of the DWP using 40 hours before, everything I've seen is based around 35 hours. I'd be surprised if it is 40 hours as full time in local authorities is 37 and NHS is 37.5.

I'm really not sure about the SE single parent 24 hour question as not looked at those aspects of it yet.

MissMoneypenny

samasama wrote: »

What this doesn't take into consideration is that sometimes self-employment hours aren't actually paid - for instance if I am driving to see a customer or buying essentials from a wholesaler, or spend a couple of hours designing/printing advertising materials I can't charge anyone for that.

Of course you can't; when you are self employed you don't get paid for everything that you do! Things like this should all be factored into your business plan.

samasama wrote: »

is there any news yet on how self-employed single parents will be treated - will the UC rules be the same as tax credits (thereby meaning I can be self-employed for 24hrs a week and not be penalised?).

Most self-employed people have a better work ethic, tons more motivation and drive and are less likely to be off sick

People with "a better work ethic, tons more motivation and drive" don't limit their working week to just 24 hours! 24 hours a week sounds more like the minimum self employed people have to do to maximise their welfare payments or/and avoid JSA conditions.

When I was self employed and a single mother with 2 children at primary school, I was working 60+ hours a week to make my business keep us all.

Icequeen99

MissMoneypenny wrote: »

I don't read it as you have. Perhaps IQ could give her readings on that?

I read it as (in your example) the £200 is protected (because of the bit I embolded above in your quote), but no transitional protection is offered on their self employed earnings, because they did not meet the minimum amount they had to earn before they went on to Universal Credit.

As stated in your quote above, "transitional protection will not be offered to self-employed claimants against the effects of the Minimum Income Floor".' i.e - the days of saying you work long hours but earn less than the NMW (or more than NMW if the government decide someone doing that job should earn x per hour) and want benefits to make-up your wages, will end when the claimant goes onto Universal Credit; as there is no transitional protection for that part of the move onto UC.

The government want to close the loophole of self employed people claiming their wages from welfare, as it's being abused.

I am not sure actually, i need to think it through!

EDITED to add: I don't think the example given by the previous post is right from a TP point of view. I think it will be if you are entitled to £400 in the current system, only £300 under UC (before MIF) then you will get £100 TP amount, however if the MIF means that £300 is reduced to £100 you would get the £100 plus TP of £100. I think that is how I interpret it.

:huh:

MissMoneypenny

Icequeen99 wrote: »

I am not sure actually, i need to think it through!

EDITED to add: I don't think the example given by the previous post is right from a TP point of view. I think it will be if you are entitled to £400 in the current system, only £300 under UC (before MIF) then you will get £100 TP amount, however if the MIF means that £300 is reduced to £100 you would get the £100 plus TP of £100. I think that is how I interpret it.

:huh:

:rotfl:The written word can be so confusing. I hope the government make it clearer.

I think I'm reading it the same as you: the £400 could be reduced to £200 under UC, because of the MIF and no TP for self employed.