Self employed - have to pay back Universal Credit?

moneymabel

I'm self employed and unable to work so have put in a claim for Universal Credit, this will be backdated to the middle of March, will then be applying for the self employed grant when it's available in June, this will also be backdated to the beginning of March. When I get that will I have to pay back the Universal Credit I have had in the meantime? As I would be getting two benefits over the same time period. Thanks for any help

Hermann

No, but in the month you receive the grant you declare that and this will reduce your UC payments possibly to zero.

calcotti

You may find this helpful https://www.understandinguniversalcredit.gov.uk/new-to-universal-credit/self-employment/

Jeremy535897

If you put the grant into your personal bank account when you receive it, I suspect that will be counted as savings for UC calculations from that point. 

calcotti

Jeremy535897 said:

If you put the grant into your personal bank account when you receive it, I suspect that will be counted as savings for UC calculations from that point. 

I think that is partially true. Depending on the numbers involved some of the grant may be carried forward as surplus earnings and I think any amount treated as earnings would not also be treated as capital. 

Jeremy535897

I would agree that would be fair, but is it reality? For the average worker whose sole source of income over the years has been earnings, and who has managed to put £16,000 aside by scrimping and saving, and is now unemployed through no fault of their own, there is no recognition in UC that those savings came solely from taxed earned income.

calcotti

Jeremy535897 said:

I would agree that would be fair, but is it reality? For the average worker whose sole source of income over the years has been earnings, and who has managed to put £16,000 aside by scrimping and saving, and is now unemployed through no fault of their own, there is no recognition in UC that those savings came solely from taxed earned income.

None, capital over £16,000 cannot claim. Already claiming and capital goes over £16,000, entitlement ends.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/864936/admh1.pdf confirmsthat unspent Income becomes capital.

“H1050 Income becomes capital if it has not been spent by the end of the assessment period after the one in which it was received.

Example

Pearl makes a claim for UC on 6 February. She declares savings in a bank account of £5,973.00. On 24 February, her earnings of £250.00 are paid into that account. Her assessment period is calculated as 6 Feb to 5 March and the earnings are taken into account as part of her income for that assessment period. When the next assessment period begins on 6 March, Pearl still has some of the unspent earnings so the bank account balance is now £6,105.00. In the assessment period from 6 March to 5 April she will therefore be treated as having an assumed yield from that capital of £4.35.”

Worth noting that the critical date is the last day of the assessment period, that is the date on which capital is valued. 

Jeremy535897

So when your grant goes into your personal bank account, it is treated as income and probably eliminates UC for that month at least. If you don't spend it, or you waste it or give it away, it will be treated as capital next month and might reduce UC in the future. Tax credits had many faults, but this is daft.

Petriix

Jeremy535897 said:

So when your grant goes into your personal bank account, it is treated as income and probably eliminates UC for that month at least. If you don't spend it, or you waste it or give it away, it will be treated as capital next month and might reduce UC in the future. Tax credits had many faults, but this is daft.

Of course, that might be a sensible time to pay for some business expenses such as new equipment or perhaps clear the backlog of invoices due. That way your grant is offset against your expenditure before income is calculated. 

Jeremy535897

In other words, if you receive a grant and sit on it for a bit, you probably get no UC in the month of receipt, and potentially reduced or no UC until you spend it (on permitted things). If you immediately spend it on a business expense instead, your UC is unaffected because the grant is reduced by the expenditure, and your capital doesn't go up. In a perverse way I suppose it has some logic, as the grant is there to be used, not saved.