Universal Credit Claim

sabelu

My son in law has been made redundant, under 2 yrs service, and is paid notice to end of September. My daughter has this tax year started a new business and earns around £1600 per month gross maximum and obviously will not make an HMRC declaration until April 21. From the £1600 she also has declarable expenses so her net is lower than that as well as start up costs which will mean this year she’ll make a loss. 

My daughter is due to give birth in November so will stop work in mid October and unfortunately have no claim to SMP or SMA as she was training for her new business the latter months of 2019 into 2020 before commencing the business.
Given my son in law is not officially unemployed until the end of September when should he claim for UC. The complication is my daughters income for this tax year will be taken up with both overheads on her start up. So what would my son in law quote as her earnings on any UC claim when in actually fact on her tax return these will be first year losses?
Equally are there any maternity allowances my daughter can claim in her situation even if she has to make an early NI contribution that would not normally be payable until December 21 with her tax if any for this year.
My son in law has started a JSA claim and has told me he is not entitled to UC, which I find hard to believe under the circumstances, they have the usual bills including a mortgage he has also looked into council tax reduction which seems to be only £16 for the remainder of the year, really?
The two of them have been in work for 12 years since school any ideas as to what can and should be claimed and how my daughters current takings that will not materialise into either tax payments as she won’t have a profit over 12.5k this year.

poppy12345

If he hasn't yet finished work then he won't be entitled to any New style JSA. He needs to wait until after his employment ends.

For UC it will totally depend on their circumstances. As your daughter is self employed then she will need to report her earnings and expenses on her journal each month.

Claiming UC depends on montly earnings during your assessment period.

They can use a benefits calculator to check entitlement. If they don't have any children at the moment then they won't be entitled to any work allowance, which will be a 63% deduction in UC for earnings received during their assessment period.

Once the child is born they will be entitled to a work allowance of £512 per month (because they won't be claiming for help with any rent), which means they will be able to earn that much before the 63% reduction will apply.

They won't be able to claim for any help with the mortgage.

They should use a benefits calculator to check entitlement to UC but they should wait until after he receives his final pay before claiming, otherwise their UC would most likely reduce to zero for that month.

sabelu

poppy12345 thanks for this he has physically stopped working but paid to end of September does this change the claim date?
Also as stated my daughters earnings of 1600 max per month are gross before any expenses and will be eaten up by her first year sole trader loss how is this calibrated within the calculation if it’s not she will be affected detrimentally by this as her tax return is not calculated until April 21 she is a sole trader therefore not on PAYE

poppy12345

He will not be entitled New style JSA until after his employment offically ends. Once it's ended, if he's paid the correct amount of NI contributions in tax years April 2017 to April 2019 then he'll be entitled.

She will be classed as self employed for UC and she will need to report her earnings and expenses each month on her journal. See link.

https://www.gov.uk/self-employment-and-universal-credit

The New style JSA will be deducted in full from any UC entitlement.

sabelu

What about the council tax reduction doesn’t seem right £16 for the remainder of the year

Spoonie_Turtle

Do they own a property or have any savings? I find it odd that your son specifically said they're not entitled to UC so I'm wondering what the reason is, whether they really aren't entitled or if he's misunderstood/been misadvised.

That said, your daughter's monthly income might be too high for any award to be payable until they're entitled to a higher award once the baby is born, unless this is not their first child.

For UC, self-employed people report income and expenses in the month they are paid, so overall loss doesn't really come into it unless in any month the expenses are more than the income. It seems counter-intuitive but as a means-tested benefit it is simply based on what money they have each month to live on. For overall profit that's what the tax return is for, which HMRC deals with. (UC is administered by the DWP, a separate department.)

(Edit: I know almost nothing about council tax so can't advise about that.)

poppy12345

sabelu said:

What about the council tax reduction doesn’t seem right £16 for the remainder of the year

As previously advised, tell them to use a benefits calculator and this will tell them what they are entitled, if anything.