Full time self employment incompatible with UC?

calcotti

AG47 wrote: »

So my benefit calculator numbers are correct are they? Just started self employment right now

In that case the MIF should not be applied for 12 months and calculator numbers should be correct based on the information you have entered.

gilbutre

AG47 wrote: »

If somebody doesn’t earn anything at all and is just looking for work then they get the full amount, but if they do a little work and earn a small amount then they suddenly are assumed to be earning the MIF?

Exactly my thought and it sounds a little absurd to me.

calcotti

gilbutre wrote: »

Originally Posted by AG47
“If somebody doesn’t earn anything at all and is just looking for work then they get the full amount, but if they do a little work and earn a small amount then they suddenly are assumed to be earning the MIF?”

Exactly my thought and it sounds a little absurd to me.

That isn’t the way it works. If somebody is a job seeker and does a little work they continue to get UC with a reduction to take account of their earnings.

If somebody says they wish to be treated as gainfully self employed, and therefore are not required to look for employment, they are given 12 months start up period following which the MIF is applied. Claimant can, if they wish, say they no longer wish to be treated as gainfully self employed in which case the MIF is no longer applicable but they will be required to look for work.

If a job seeker has some limited self-employment they can ask for their job search requirement to be reduced to reflect that they have some income from self-employment but can continue to be treated as a job seeker, in which case the MIF does not apply.

tomtom256

calcotti wrote: »

That isn’t the way it works. If somebody is a job seeker and does a little work they continue to get UC with a reduction to take account of their earnings.

If somebody says they wish to be treated as gainfully self employed, and therefore are not required to look for employment, they are given 12 months start up period following which the MIF is applied. Claimant can, if they wish, say they no longer wish to be treated as gainfully self employed in which case the MIF is no longer applicable but they will be required to look for work.

If a job seeker has some limited self-employment they can ask for their job search requirement to be reduced to reflect that they have some income from self-employment but can continue to be treated as a job seeker, in which case the MIF does not apply.

The claimant doesn't decide if they are or are not gainfully self employed, an enhanced work coach trained in self employment will decide if they are or not, based on evidence provided at their gateway intervention.

If the claimant then decidse they no longer want to be classed as self employed, they will need to provide evidence of this or the MIF, if applied will stay in place, until such time sufficient evidence has been provided.

calcotti

tomtom256 wrote: »

The claimant doesn't decide if they are or are not gainfully self employed, an enhanced work coach trained in self employment will decide if they are or not, based on evidence provided at their gateway intervention.

If the claimant then decidse they no longer want to be classed as self employed, they will need to provide evidence of this or the MIF, if applied will stay in place, until such time sufficient evidence has been provided.

Surely, almost by definition, if they are not earning enough they are not gainfully self employed. Does the claimant not therefore have the choice of saying I want to be treated as a jobseeker but would like hours of work search adjusted to reflect the fact that I have some ancillary self employed income? That's what the UC roll out manager in the area I live told was how it was going to work - which if cause doesn't mean it does!.

I note that ADM says:

“H4022 A claimant is in gainfully S/E where for the purposes of UC, the Secretary of State has determined that
1. the claimant is carrying on a trade, profession or vocation as their main employment and
2. their earnings from that trade, profession or vocation are S/E earnings (see H4012 et seq) and
3. the trade, profession or vocation is organised, developed, regular and carried on in expectation of profit.
In order to be in gainful self-employment for the purposes of UC, 1., 2. and 3. have all to be satisfied. If any of those are not satisfied then the claimant cannot be in gainful self-employment.”


“H4025 Evidence ... which may indicate whether the trade, profession or vocation is the main employment include
1. a statement of the number of hours spent on the activity and
2. the claimant’s intention as to which activity is their main form of employment
and
3. the amount of earnings from the S/E activity.”

So if, for example, a claimant says they are going to job search for 20 hours/week and evidences that surely they cannot meet the first part of this test (unless they have significant S/E earnings in which case the MIL is irrelevant).

Isn’t the point of the 12 month start-up and MIL to first give a claimant a chance to develop self-employment but then to compel them to consider whether it is actually viable an, if not, to revert to looking for employment?

ADM also says:
“H4032 The S/E activity is unlikely to be the claimant’s main employment where the claimant
1. undertakes only S/E activity and that activity occupies significantly less than half the expected hours or
2. undertakes S/E and employed earners activity and the S/E activity takes up more time than time spent on employed activity but still only represents a small proportion of the expected hours of work.”

tomtom256

Yes in theory, but they have to prove they have ceased trading or it isn't their main role or the MIF will stay. I can provide evidence of most things, but it doesn't mean I have actually done it.

It isn't as simple as not wanting to be found GSE, they have to actually prove it, especially if they have already been found to be GSE, especially when the MIF kicks in and treats them as having earnt £1148.22 or whatever it is for that month.

You'd be surprised how many people who have been self employed claiming tax credits for years, suddenly no longer want to be classed as self employed when they start to claim UC.

The MIF is there for newly self employed people. From Septmeber next year all new self employed claimaints will get a start up period.

calcotti

Thanks for your take tomtom. Once again there seems to be a difference between theory and practice. I think it is clear however that somebody who does a little self employment isn’t suddenly going to have the MIF applied as suggested by AG57.

Re your last paragraph I thought all newly self employed people already got a start up period and the change from next September is that self employed people who transfer to UC will also get the startup period even if they have already been self employed for more than 12 months.

huckster

All newly self employed people do get 12 months start up period with no MIF.

And your point about the change from September 2020 regarding self employed who are transfered over to UC makes sense. There are many self employed who currently earn below the MIF, who currently receive help from tax credits. Part of the managed migration process will be to ensure that those people who are migrated (managed) across from TC to UC, do not suddenly lose out. Applying the 12 month start up for these people makes sense, as it gives them 12 months to try to increase their incomes.