Minimum income floor

Perti

Hi, can anyone help me wit this question..

I’m on a 12 months starting up period with universal credit. I’m self employed. I was told that the minimum income floor after the starting up period is £1556. 

My question is let’s say for example I turnover 1700 in that month and after taking off UC allowed expenses I’m left with 1200, is the minimum income floor set against the 1700 turnover or the 1200 left? 

Thanks

Yamor

Net profit, so the 1200 figure.

Perti

Thanks for the reply. So what you have said is the same thing as what they have said here? 

"This is the figure (£1556) the claim will be assessed at no matter what. Its 35 hours a week times national minimum wage of £11.44 an hour"

If they are basing the income floor off  35 hour week at 11.44 this is the amount received before anything is taken off.

Would that not be the same case for the self employed before anything is taken off?


Thanks 

Yamor

Yes it is the same as what they have said.

The current MIF figure for 35 hours of £1,556.30 is calculated based on 35 hours per week at £11.44 per hours, less notional amounts for tax and national insurance.

Perti

Thanks, so based on this information....

 If I made 2000 for example in one month, and this is the figure they will original ask for based on any money made through self employment from one date to another (before business expenses) when reporting income. If let's say I have a bad month with expenses and my expenses are 600 this would mean...

2000 - 600 = 1400

The 1400 regardless of expense through self employment, it is this figure that is assed against the 1556.30 which would mean it falls under the MIF?

It's 100 percent "not" the 2000 in the example above they assess the MIF against? 

Spoonie_Turtle

Before going further with an explanation, what is your understanding of the function of the MIF?

Yamor

Perti said:

Thanks, so based on this information....

 If I made 2000 for example in one month, and this is the figure they will original ask for based on any money made through self employment from one date to another (before business expenses) when reporting income. If let's say I have a bad month with expenses and my expenses are 600 this would mean...

2000 - 600 = 1400

The 1400 regardless of expense through self employment, it is this figure that is assed against the 1556.30 which would mean it falls under the MIF?

It's 100 percent "not" the 2000 in the example above they assess the MIF against? 

Correct, the 2000 figure has no relevance.

It may be worth pointing out (which was probably the reason for @Spoonie_Turtle 's post) how the MIF works.
Your income in any month is not somehow assessed against the MIF, rather the MIF acts as a minimum, and in any month in which your earnings are lower than the MIF, your benefit will be calculated based on the MIF amount.

xxxxxxxx

Perti, 
The MIF is the minimum amount UC will consider you have as net earnings. 

If after your 1 year starting up period, you earn in any month £2000 gross and have expenses of £1400 that is a real life net income for that month of £600. 
UC, will treat you as having a net income for that month of £1556.

If in another month your real life net income is £2000, UC will use the higher amount of £2000. 

SirSteven1986

Following this as looking at potentially going self employed, so say MIF was added at 1556 and expenses where  350, your entitlement was say 900. Would you receive anything? 

Also what’s the process on setting up the year grace? Been employed 20 hours and declaring 10 hours self employed atm but business is starting to pick up 

poppy12345

SirSteven1986 said:

Following this as looking at potentially going self employed, so say MIF was added at 1556 and expenses where  350, your entitlement was say 900. Would you receive anything? 

Also what’s the process on setting up the year grace? Been employed 20 hours and declaring 10 hours self employed atm but business is starting to pick up 

You will need to report a change of circumstances and tell them you're self employed. You will then need to attend your local job centre for a gateway appointment with a work coach. If found to be gainfully self employed you will have the 12 month start up period. https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/universal-credit-and-self-employment-quick-guide

After that the MIF will apply unless you're exempt. Based on the rules now if your earnings are less than your MIF then you will be treated as if you did earn that amount. If it was £1,556 and you don't have the work allowance then your deductions would be £855.80/month.. (£1,556 x 0.55)