Should I switch to universal credit?

Spoonie_Turtle

Prunetheroses123 said:

A single friend of mine is due to migrate across from WTC to UC later this year

At the moment runs a self employment business that barely makes £3000 a year, they own their property as parents helped their share of inheritance early to try to help

She barely has any savings and is living hand to mouth with relatives sending money to help meet the bills

Any minor change in her life sends her into a meltdown/anxiety/obsession problems and she barely leaves the house but won’t seek help from health professionals

With the recent energy increases she has stopped eating as much and lost weight

She owns a quarter shares for years in a piece of land which could result in about £18000 the others do not need to sell in a hurry how will these impacts UC  and what will happen when she claims?

She needs to get a fit note from her GP when she migrates, report her health condition, and have a WCA.  If found to have LCW/RA she won't be classed as gainfully self-employed nor have to look for work.  I note you say she won't seek help, if that will include not asking for a fit note then she's really going to struggle with UC.

If she doesn't get a fit note and report her health conditon(s), she will likely be treated like a jobseeker and forced to look for work and attend appointments (and be sanctioned for not attending, if she's not well enough to) - or, if they do deem her gainfully self-employed, have the MIF imposed after 12months and likely have no financial help at all from UC.  She may also be required to attend periodic appointments for self-employment, I'm not sure.

If she can't sell her share of the land she will have to request the value be disregarded after the initial 12months, I don't know how likely that it.

poppy12345

DigitalDax said:

Either your business is capable of making a profit and supporting you (to the tune of 35h/week x NMW) or you may be better off calling it a day

One of the problems with how UC has been done is the arbitrary calculation deciding what they say I must earn. They haven't looked at my outgoings or how much I actually need to cover my bills

Benefits have never taken into consideration the bills you have to pay and this included WTC.

Mammamia68

Spoonie_Turtle said:

DigitalDax said:

If you are self employed and don't get help with childcare or rent, then I strongly recommend...

Do NOT move from Working Tax Credit to Universal Credit!

Everyone will eventually have to go across but until you are forced to, I would delay it as long as possible. I got a letter saying I needed to migrate across soon, so I started the process to save time. The letter said that the majority of people will get the same, if not more, than they received via WTC. I even used one of their recommended online tools to check what I should get and it said roughly the same as WTC. Absolutely rubbish. After a first meeting with my "work coach" (how patronising is that considering I have been self employed for many years and do not require any coaching) I will end up with nothing but more forms to fill in - much like the rest of the self employed.

You should have got transitional protection for a year.

This is how it was explained to me...

The Minimum Income Floor is around £1400 a month for me - this is the figure set by them to be the minimum liveable wage. Even though I do not require this much per month, I get no say over that figure. If I earn less than that for a few months they will consider me "not gainfully self employed" and I will have to stop being self employed and look for another job. If I earn more than about £350 a month (roughly the UC I would get) then for every pound over, 55p will be knocked off my UC. So, if I did manage to earn the minimum £1400 a month then I would lose £577.50 from my UC, i.e. much more than I could possibly get.

The figure is not arbitrarily set but is calculated as {your expected working hours} x NMW.

If your UC is only £350 then presumably you don't have any children and thus not the work allowance (if you had LCW you would not be gainfully SE and the MIF would be irrelevant) and unfortunately the 55% deductions apply to all of your earnings.

Catch 22. Earn too little and you get kicked off of UC. Earn what they say is the minimum you must earn and you get no UC, but you do still have to do all of the form filling, online journal entries, online earnings calculations, regular meetings with your "work coach" etc. which is more work... for nothing. I can only see this as a way to completely remove any kind of working credit for self employed people who are trying to build something to help their family, the economy, keep the unemployed figures down and perhaps even get big enough to employ other people in the future. Even my "work coach" said they are going to see a lot of people upset by this nonsense.

No you won't.  You just won't get extra money in your payments to top up the income lower than that.

If your maximum UC is eroded to nil by your MIF anyway then no, you won't get any once the MIF applies.

For the first 12 months of your claim the minimum income floor does not apply (rules changed a while into the pandemic, it used to apply straight away if you'd been trading for 12months or more).

Tax Credits did also have a requirement about self-employment being gainful - i.e. meeting the same kind of tests that UC sets out - but didn't really enforce it.


I'm not sure you've had UC explained properly to you though, so helping you understand how it actually works would be a good start so then you can see what your situation actually is.

My partner has just been through this. The ‘migration protection’ is actually only an amount added as a top to your claim, a similar figure to the single person allowance in his case. So it isn’t designed to bring your UC up to whatever you were previously getting under WTC, despite what the government promised. The whole system is a joke that penalises the SE.