What is gainfully self-employed / minimum income floor ?

Daytona

I claimed Universal Credit back in March (I realise I should have claimed earlier). I’ve received a letter about the MIF being applied to gainful self employment and would like to know where I stand.

After a career in IT many years ago, I paid off the mortgage and now work as a petcarer which I love. I only need ~£6000 to live off and have no wish to work full time.

I’ve been badly affected by Covid so currently earn ~£2000pa

Have I understood correctly that UC expects me to work 40hours a week at the minimum wage (£18,000pa)?

(Also I have been unable to claim my personal pension as they changed the rules – I can now access it in 18 months at age 55)

Does anyone know what is likely to happen ?

Thanks for any help getting my head around this

calcotti

Daytona said: Have I understood correctly that UC expects me to work 40hours a week at the minimum wage (£18,000pa)?

If you are treated as gainfully self employed you are expected to earn 35 hours x NMW per week from your self employment (£1,351.35/month).  It doesn't matter how many hours you actually work, it is the earnings that matter. The MIF means that if you earn less than this you are treated as if you have earned that much. If you earn more than this your actual earnings are used. 

Daytona said: (Also I have been unable to claim my personal pension as they changed the rules – I can now access it in 18 months at age 55)

Does anyone know what is likely to happen ?

Not clear what you are asking but here are some points that may be relevant.

• If you leave your pension pot alone it has no impact on your UC entitlement.
• If you take regular payments from it these will be deducted in full from your UC (so it makes no sense to do so if you are claiming UC as you would effectively be simply transferring funds from your pension pot to the DWP)
• If you take an ad hoc lump sum it is treated as capital and if this takes your total capital over £6000 will reduce your UC by £4.35/month for every £250, or part thereof, over £6000. If you go over £16,000 your UC ends.

Alice_Holt

A careful read of these guides will tell you about the MIF, and what to expect.


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

https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/minimum-income-floor/

https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/universal-credit-and-self-employment-quick-guide

https://www.understandinguniversalcredit.gov.uk/new-to-universal-credit/self-employment/


"  f you are self-employed, Universal Credit will provide support to help you grow your business.

To get this support you will need to be able to show that:

• self-employment is your main job or your main source of income
• you get regular work from self-employment
• your work is organised – this means you have invoices and receipts, or accounts
• you expect to make a profit

If you can show all these things you will be considered to be ‘gainfully self-employed’. If you can’t show all these things you might have to look for other work if you are to keep receiving Universal Credit.

However, it will be assumed that you are earning the same amount as someone like you who is in paid work. This will usually be what someone of your age would earn if they worked at the National Minimum Wage for the number of hours that you are expected to work or look for work. This amount is called the Minimum Income Floor.

If you already have a claim, Universal Credit will contact you about these changes before they happen.

If you earn less than the Minimum Income Floor, Universal Credit will not make up the difference. You may need to look for additional work to top up your income.

If you earn more than the Minimum Income Floor, your Universal Credit payment will be based on your actual earnings.

The Minimum Income Floor will not be applied for up to 12 months if you are newly gainfully self-employed. This is known as a start up period, and during it you won’t need to look, or be available, for other work. But you will need to show that you are taking steps to build your business and increase your earnings when you talk to your Work Coach.

You must report any earnings from self-employment to the Department for Work and Pensions every month."

stutakesphotos

You mention being affected by covid (sorry to hear that). Are you still feeling the affects of this?

I ask as a health condition may mean they do not apply the minimum income floor

calcotti

stutakesphotos said:

You mention being affected by covid (sorry to hear that). Are you still feeling the affects of this?

I ask as a health condition may mean they do not apply the minimum income floor

I read OP to mean that her business has been badly affected by COVID (but it may be her health in which case  your point is well made).

Daytona

Sorry yes, I meant my business has been badly affected by Covid.

And to update, I'm no longer eligible for any benefits.