Universal Credit and self-employment

Enigmaman

I am contemplating making a claim for Universal Credit, which has been rolled out locally.

I am getting Tax Credits at the moment but understand that I will be moved over to UC in due course anyway.

I have a couple of questions with which I would be grateful for some help.

First of all is the question of how my self-employed earnings would be assessed. I have heard that, instead of taking a weekly average profit based on a whole year's Profit and Loss accounts as at present, they would be assessed month-by-month. If I had a good month that put me over whatever the threshold for earnings is, I would get no UC, or at best a reduced amount, that month. Can anyone confirm this, or otherwise?

Secondly I am wondering what is happening with ESA. Tbh 30 hours per week self-employment is getting too much and under the old system I would be discussing with my GP the prospect of getting signed off sick and looking at doing <16 hours per week Permitted Work. Assuming the same option exists with UC, how much of my earnings would I be allowed to keep? If any? Is the ceiling still £120 per week?

Alice_Holt

Re your first question -
look at the links I posted in one of your previous threads on UC:
https://forums.moneysavingexpert.com/discussion/comment/72773441#Comment_72773441

Caz3121 gave you a useful link in another of your threads on this topic:
https://forums.moneysavingexpert.com/discussion/5669255

If you follow those links it will give you the answer that no UC would be payable if monthly earnings are above UC thresholds.
UC is paid monthly based on your assessment period, UC is calculated monthly and well vary each month depending on your earnings.

As an aside self-employment and UC is proving very difficult.
https://forums.moneysavingexpert.com/discussion/5683005

Re your second Q.
Permitted work doesn't exist under UC. UC has work allowances.
See: https://www.base-uk.org/permitted-work

Hope this helps.

Enigmaman

Thanks but none of the links fully answer my questions.
Under UC, are self-employed earnings assessed monthly and UC payments adjusted accordingly? I still do not have the answer to that.

As for Permitted Work/Allowed earnings:

"The Universal Credit work allowances for people with limited capability for work are £397 per month for those with no housing costs and £192 per month for those with housing costs. Once a person is earning more than their work allowance a taper rate of 63% is applied to their remaining earnings, reducing the amount of UC that they receive."

Does the figure of £397 per month exclude Housing Benefit payments? My rent is around £90 p.w. so that leaves next to nothing before the taper kicks in. How much in total can you still earn under Work allowances? Still £120 p.w. max? Which would be subject to a 63 per cent taper over the specified amount -almost all, by the look of it). Would the remaining income also be subject to a taper on Housing Benefit?

Is Council Tax Support payable if you are sick and working <16 hours per week and getting UC? Is that subject to a taper also?

It is not even as if you can go into a Job Centre and get a Better Off Calculation now (if indeed you have one as my local JC is closing). I know online calculators exist but it is not the same as talking to an adviser.

Ring the UC helpline, an astronomical premium rate call, hold half an hour and then you get through to an "adviser" who speaks barely comprehensible English.

It is going to be a hard slog working out if I would indeed be better off idf I went sick. Enough to make you ill, in fact. All this relentless benefit hassle is grinding me down. I cannot believe the government is getting away so lightly with severely bashing the sick/disabled and self-employed, and in so many ways at the same time.

Where is the public outcry that they so richly deserve?

poppy12345

Isn't "permitted work" for those already claiming ESA? It doesn't really make sense to start claiming a benefit because you have a limited capability for work (fit notes needed) then do permitted work. Hopefully Alice will come along and answer my question or anyone else of course.

tyler2027

Self employed claimants on UC are judged against the minimum income floor (MIF) relevant to their circumstances. If you were just starting out self employment, they give you a year to establish yourself before implementing the MIF.

UC take the monthly figure of the MIF, apply any relevant work allowance (£192 per month if you rent) and establish a monthly payment of UC if you qualify. Then each month they assess your actual self employed income. If its the same as, or less than, the MIF you get the same payment . UC is not increased if actual income has gone down. If you earn more than the MIF, you get less UC. If you earn too much, you get no UC that month.

A UC calculation is made up of elements..ie basic element, housing element etc. A final figure is arrived at, and income and tapering set against. The end result if qualifying is a payment of UC. It is important to note that at this point it is one payment, not made up of individual elements. Reductions for extra earnings can reduce the payment, no element ie housing is protected.

For more info
https://www.citizensadvice.org.uk/benefits/universal-credit/before-you-apply/self-employed/

Permitted work does not exist under universal credit. You would only get to keep some of your income if you qualify for a work allowance. If you qualify at least for limited capability for work, and you rent, the work allowance is £192 per month, just under £46 a week. This is a lot less than the legacy esa which allowed just under £120 pw from permitted work without affecting benefit.

You would only get the higher work allowance of £397 if not claiming housing costs because your say an owner occupier, or live with family and therefore have no rent liability.

Council tax reduction is run by each individual local authority, so there is no standard formula for working out entitlement. Each area has their own rules and regulations on who is eligible to apply, and the maximum % of help given.

Enigmaman

Thankyou for the clarification, which is helpful. This totally sucks by the government.

Yet another brutal cut on top of all the others.

So if I understand correctly, in a good month the self-employed will be no better off for their efforts. Housing Benefit (although no longer called that) will be cut as well.

Where is the incentive to work?

This is so damaging to people such as myself with a disability who are doing their best to make something of their lives. I expect my tax Credits will be stopped after this year's review anyway, so I don't know what I am supposed to do then.

Still, easier to pick off the sick and self-employed no doubt.

This government fully deserves a bloody nose for what it is doing and I hope they get it.

I am far from the only person in this position.

The personal is the political.

Come on people, speak up and don't let yourselves be ploughed under.

Stick together and fight this or you will be picked off, banished to eternal poverty and left to rot.
]
i am writing to my MP as a starting point.

A few hundred thousand letters might make the government think again.

Or are the British people now fully cowed and politically neutered?