Universal Credit - Self employed housing element

joebloggs69

Hi Guys,

I'm going to talk to the UC people about this but would quite like to have some info before I go in.

Since August I have been classed as self employed by UC, although basically I am working freelance for companies one or two days at a time as they need me in the hope of eventually building enough clients and earning enough each month to come off UC entirely. And business has been growing although erratic.

Obviously, whatever I earn each month gets taken off my UC.

My total monthly UC payment is about £700, including £400 housing element. My outgoings are about £900 and I can't get them any lower. If I earn, say, £700 in a month, I get it all taken off the UC payment except for an allowance of about £100. Is this correct? Should I still be getting the housing element? Assuming someone meets the criteria for housing benefit, is it worked out the same whether they are employed or doing what I'm doing?

I don't understand how I know people in full time work and they still get housing benefit, but mine gets reduced. It just means, financially speaking, it's not worth me taking any work that pays less than £700 (not to mention then chasing invoice payments for 3 months!). Obviously I'd rather be working and building the business etc than sitting at home, but it makes it very hard to make ends meet. I'm short by about £200 each month, and no matter how much work I take on it rarely exceeds £700 at the moment.

Obviously I think I'll have to go back to job hunting but it's a shame because this will pay off if I can last a few more months.

marliepanda

Your base entitlement is £700?

So they’ve decided you need £700 to live on, so if you earn £700 then you’ve gone over. Surly if you still get £100 from UC you’ve now got £800, leaving you with £100 to find and not £200

If ta going to pay off in a few months just take everything you can get, the more you do, surely the more you can grow your business.

huckster

Suggest you phone Universal Credit and ask to book a meeting with a Job Centre work coach. They will book you in with a relevant time slot to talk about this.

Ask what help DWP/Government provide to self employed in their first year. From what I have read, one of the concerns with UC is supporting self employed, particularly in their first year. The Job Centre work coach can make enquiries for you.

Mersey_2

joebloggs69 wrote: »

Since August I have been classed as self employed by UC,

Obviously, whatever I earn each month gets taken off my UC.

My total monthly UC payment is about £700, including £400 housing element. My outgoings are about £900 and I can't get them any lower. If I earn, say, £700 in a month, I get it all taken off the UC payment except for an allowance of about £100. Is this correct?


Should I still be getting the housing element?

This isn't correct. Yes, you should still receive the housing element.


It may be that the DWP haven't yet processed/actioned the Housing Element of UC. Sadly, I have seen this with a couple of self-employed UC claimants.


You should have been given a UC5 booklet and also details by post of how your UC payment has been calculated each month.


From what you have said above, it sounds as though you may not have received either.


Although there are several ways where an error may have occurred. Also remember that UC payments the following month are based on what is reported to the DWP in the monthly 'reporting period.' For most self-employed claimants this should be done by the claimant. ie you report your self-employed gross earnings as well as deductions such as expenses for travel, NICs, pension contributions etc.


Here is a basic overview, but there's more detailed explanation of the Taper and reliefs and deductions on the turn2us and rightsnet sites. www.citizensadvice.org.uk/benefits/universal-credit/before-you-apply/self-employed/

joebloggs69

Thank you all for your replies.

I haven’t received anything at all through the post and never seen any booklets.

My assessment period runs from 25th one month through to the 24th the following month, I declare earnings online on 25th each month, then I get paid on the last day of that same month according to my earnings that month.

I pay £400 rent for a room in a house (cheapest I can get locally), £150 a month minimum credit card repayment and £150 to run a car. I just don’t see how I’m supposed to survive when whatever I earn gets taken off pound for pound.

marliepanda

UC isn't intended for credit card payments. That £150 could be your food.


Can you do your self employment alongside regular employment until you are more established?

Mersey_2

joebloggs69 wrote: »

Thank you all for your replies.

I haven’t received anything at all through the post and never seen any booklets.

My assessment period runs from 25th one month through to the 24th the following month, I declare earnings online on 25th each month, then I get paid on the last day of that same month according to my earnings that month.

I pay £400 rent for a room in a house (cheapest I can get locally), £150 a month minimum credit card repayment and £150 to run a car. I just don’t see how I’m supposed to survive when whatever I earn gets taken off pound for pound.

Sadly, this is as I suspected.


Call the national UC contact centres and ask them to open a complaint and in the meantime request your monthly calculations for each monthly payment to date, (as well as the UC5 pack for self-employed UC claimants - although the latter won't be of much use now as it is several months late).


This should at least set the wheels in motion to resolve the error(s) at their end. Sadly, JCPs are of little use re UC payments as they cannot view, administer or alter any of these.


For your part, you are correctly fulfilling what is required of you (by reporting monthly earnings within 7 days of the end of your reporting period), so the fault does not lie with yourself.

WillowCat

Universal credit shouldn't be reduced pound for pound of your earnings - the taper rate is 63p in the pound.

Mersey_2

marliepanda wrote: »

UC isn't intended for credit card payments.

Please remember the site guidelines. There really is no need to be so condescending towards OPs (yet again), especially when you are not even answering what the OP asked.

joebloggs69

Thank you both, I will contact them. I have to admit as an end user, it’s hard for me to tell the difference between JCP, UC and whatever else, especially as no one tells you anything. I did ask the woman at the JCP last time about the housing element and she said “Oh, do you get a housing element?” You bloomin tell me!

One thing I do know is that if I enter £500 earnings I get £500 deducted from my UC payment, so don’t know where the 63p thing comes in. Is it possible that is for any earnings for job seekers who aren’t self employed?

If I ever find out I’ll let you know!

WillowCat

The taper rate is the same 63p in the pound for employed or self employed earnings.

The minimum income floor rules for self employment can muddy the water, but if you've only been self employed since August you should be in your one year start up period. Have they granted you this?

I assume here that you are single, over 25 years old, have no children or disabilities, and the £400 housing costs are at or below the local housing allowance figure?

You should get, if you are not working, the following:

Standard allowance: £317.82
Housing element: £400.00

Total : £717.82

If you are working and declare earnings in the month of £700.00 then your UC will be reduced by (£700 x 0.63) = £441.00

This will leave you with (£717.82 - £441.00) = £276.82 UC.

Add this to your earnings and you will have £976.82 total income.

Once you have been self employed for a year, universal credit will apply a minimum income floor. Assuming your work commitments would be minimum wage x 35 hours per week then this level of income would be used as your earnings regardless of whether your profit is less than this. Of course if you earn more then the real level of your earnings would be used.