Should my partner apply for universal credit?

skatersrus

Me and my partner live together and we have a baby together. our baby is just under a year old and my OH wishes to go back to work when our baby is around 2 years old.

I am self employed and my earnings fluctuate throughout the year. On average I earn 25K (this wont make us eligible to any UC), but the earninngs can be just £400 in December to £4500 a month in peak months like October, Septermber, March.

I read and it seems to suggest that being sole director (owner operator) of a ltd company; my wages and retained profits of the business will be used to calculate my earnings. This is done on a month by month basis, so we would be eligible for universal credit for the dead months like December. Is this the case?

calcotti

As a sole owner you are treated as self employed. Your monthly earnings will be all the income received in the month less all the expenditure regardless of how you choose to pay yourself. You would need to report these figures each month. If you have been doing this for more than 12 months you will treated as earning a certain amount even if you actually earn less - the Minimum Income Floor.
See
https://www.gov.uk/self-employment-and-universal-credit
https://www.citizensadvice.org.uk/benefits/universal-credit/on-universal-credit/how-the-minimum-income-floor-works-if-youre-self-employed/

skatersrus

Does the minimum income floor effectively make you ineligible for any UC?

calcotti

skatersrus wrote: »

Does the minimum income floor effectively make you ineligible for any UC?

No, otherwise no self employed person would be able to get a UC. It depends on your underlying maximum entitlement and other income.
You can do calculations here https://www.gov.uk/benefits-calculators

Your maximum UC entitlement would consist of Basic couple allowance plus child element (plus a housing element if you rent). If applicable the help with rent is restricted by the Local Housing Allowance for your post code http://lha-direct.voa.gov.uk/search.aspx.
Because you have a child you would have a Work Allowance which means that some of your earnings are ignored (the amount depends on whether or not you have a housing element). A deduction of 63% of earnings in excess of the Work Allowance is made. The balance is the UC payable.
https://www.entitledto.co.uk/help/Calculating-Universal-Credit