Full time self employment incompatible with UC?

gilbutre

Only on my third appointment a the job centre (for reclaiming UC since my first claim ended up being closed straight away) was I told that as a full-time self employed person, I cannot possibly receive UC payments if I'm not gainfully self-employed, minimum monthly is something like £1,150.

Is that correct?

calcotti

gilbutre wrote: »

Only on my third appointment a the job centre (for reclaiming UC since my first claim ended up being closed straight away) was I told that as a full-time self employed person, I cannot possibly receive UC payments if I'm not gainfully self-employed, minimum monthly is something like £1,150.

Is that correct?

If you are asking to be treated as self employed and have been self employed for more than 12 months you will have the Minimum Income Floor applied. Normally this will be about £1245 (assuming you are over 25 and expected to work 35 hours/week). This is the amount you will be assumed to be earning even if you earn less. If your maximum UC entitlement is less than £785/month the MIF mans there will be UC entitlement after an earnings deduction based on this amount is made unless you are responsible for children in which case some of your 'earnings' will be disregarding.

Whether or not you have an entitlement will depend on your circumstances.

https://www.turn2us.org.uk/Benefit-guides/Universal-Credit-income-and-capital/Self-employed-earnings

The simple statement as expressed in your question is muddled and wrong. You can certainly be in full time self employment and entitled to UC. Who has told you this?

Question for others posting on this forum - any idea how carry forward of self employed losses works with MIF?

huckster

In regard to self employed losses while under the MIF, when income and expenses are reported, any loss amount Is noted , even though the MIF applies for an AP. Then if the claimant has a brilliant month earning more than the MIF, then the loss amount is deducted. But not deducted to the extent that the earnings considered is below the MIF. Any loss still left is then a available to be applied later.

I believe that is how it works.

calcotti

huckster wrote: »

In regard to self employed losses while under the MIF, when income and expenses are reported, any loss amount Is noted , even though the MIF applies for an AP. Then if the claimant has a brilliant month earning more than the MIF, then the loss amount is deducted. But not deducted to the extent that the earnings considered is below the MIF. Any loss still left is then a available to be applied later.

I believe that is how it works.

That’s helpful, thanks huckster.

naturaljazz

Yes under UC rules the minimum income floor is applied. It is very tricky to be on UC and self-employed. The link on Turn To Us explains it, and you can do a calculator on there too. They are very accurate in their information. https://www.turn2us.org.uk/Benefit-guides/Universal-Credit-income-and-capital/Self-employed-earnings

AG47

WillowCat wrote: »

On Universal credit they are only interested in the earnings, not the hours. If you earned £100 an hour you could lift it by working six hours in a month.

This level of earnings would also put you in 'light touch' so you wouldn't have to keep attending job centre meetings, unless one of you is in work focused interview or work preparation group.

Are you sure Willowcat that £600 per month is enough to put you in light touch?

Is this if you are a couple with kids?

AG47

Also the MIF doesn’t apply for the first 12 months

“Start up period

If you start a business whilst you are claiming Universal Credit, the minimum income floor will not apply to you for the first 12 months. This 'start up period' gives you a chance to grow your business. In the start up period, your Universal Credit payment is calculated based on your actual earnings even if they are lower than your minimum income floor.

You get a 12 month start up period for the first 12 months of your Universal Credit claim if you started your business less than one year before you started your claim. You can only have one start up period for each business and you can only have one start up period in every five years.”

huckster

Depends on the claim details

One of a couple might be in no work related requirements.

The-Joker

Take a couple with kids renting privately, they are both working self employed trying to both start a business each. So in their first year.

They earn about £600mnth between them to start with even though they are doing their utmost to increase this.

Would either of them have to attend jobcenter for regular meetings? Or would they be on litetouch?

calcotti

AG47 wrote: »

Also the MIF doesn’t apply for the first 12 months

“Start up period

If you start a business whilst you are claiming Universal Credit, the minimum income floor will not apply to you for the first 12 months. This 'start up period' gives you a chance to grow your business. In the start up period, your Universal Credit payment is calculated based on your actual earnings even if they are lower than your minimum income floor.

You get a 12 month start up period for the first 12 months of your Universal Credit claim if you started your business less than one year before you started your claim. You can only have one start up period for each business and you can only have one start up period in every five years.”

But if you have already been self employed for 12 months before claiming UC you do not get benefit from this. I think the rule is to be changed in the future so that there will be a 12 month grace period even if already self employed but it doesn't come in until next year.

calcotti

AG47 wrote: »

Are you sure Willowcat that £600 per month is enough to put you in light touch?

Is this if you are a couple with kids?

The default Administrative Earnings Threshold for a couple is £541/month (averaged over 12 months).