UC, Self-Employed and 'transitional protection'.

SpikeyKitten

Also, 

The way self-employed vehicle expenses are worked out on mileage doesn't seem fair to me at first glance. Great if you're a travelling salesman or a taxi driver. What if you drive a coffee van to the park? A fraction of the miles, but the same eye-watering tax/insurance etc.

kaMelo

SpikeyKitten said:

Ahh ok, I think it's starting to make sense.

Well I migrated a month ago, they asked for my earnings for the month previous, which were high enough that I received nothing in UC. Fair enough. But the month since I migrated I've earned nothing. Zero. So I suppose I'll wait and see what happens next time. 

I only really 'signed on' because I believed I was entitled to Transitional Protection. (equivalent to my old WTC award). I understand what you're saying about my old WTC being paid 'up front' as it were, but I was never asked to pay any back, so can't have had 'earnings too high' previously. So whilst the 'monthly assessment' aspect of UC is starting to make sense, I'm still losing out I think. 

It's just a slight misunderstanding of how UC works and that there are different aspects of protection that all fall under the heading of 'Transitional Protection'
 The transitional element is not protected in the sense you will always received it no matter what, it can and will be reduced by earnings down to zero if you earn enough, but it still forms part of your maximum UC award going forward.  If the next assessment period you have much lower earnings then the earnings deduction will be much lower and potentially you will receive some UC.

One thing to be aware of going forward, if you have a sustained drop in earnings, below the AET, for three months in a row this may cause you to lose any transitional protection 

Yamor

kaMelo said:

One thing to be aware of going forward, if you have a sustained drop in earnings, below the AET, for three months in a row this may cause you to lose any transitional protection 

It sounds like the OP is gainfully self-employed, so this shouldn't be an issue.

SpikeyKitten

Yamor said:

kaMelo said:

One thing to be aware of going forward, if you have a sustained drop in earnings, below the AET, for three months in a row this may cause you to lose any transitional protection 

It sounds like the OP is gainfully self-employed, so this shouldn't be an issue.

That's correct. Well, I have been deemed 'gainfully self-employed' by the job-centre. Whatever that means. Myself and HMRC just call it 'self-employed'. I can only assume it's a tactic to confuse and obfuscate people into making errors in filling out forms and thus losing out on money they're entitled to. God knows, but yes, fully self-employed for about ten years. This time of year is generally slow, but it's highly unlikely I'd have three months of no income. One is unusual to be honest, I think we're into recession.

It does seem like the way it's set up is at odds with how self-employed people earn. Earnings can be wildly sporadic. But it seems that because I had a good month at the beginning of my claim, they are now going to use that as the benchmark of what I'm expected to earn all the time. I do prefer the old system of everything being balanced out over a year.

As I previously said, I only claimed UC because the letter stated I'd be entitled to Transitional Protection (which guaranteed I'd be no worse off than whilst claiming WTC). If this turns out to be false I'll probably leave the claim open for the year without Assumed Minimum Income applied, just in case, but after that, close the claim.

SpikeyKitten

Is there a reason why it's all changed and become so complicated for self-employed people by the way? Perhaps to close a loophole that people were using to financially exploit the system? Or just a general 'make it more unnecessarily complicated' in order to shake claimants off and thus save money strategy?

marcia_

SpikeyKitten said:

Is there a reason why it's all changed and become so complicated for self-employed people by the way? Perhaps to close a loophole that people were using to financially exploit the system? Or just a general 'make it more unnecessarily complicated' in order to shake claimants off and thus save money strategy?

 This ^ many people under tax credits claiming to be self employed but receiving no or little income gave full benefits. Hence gainfully self employed 

NedS

SpikeyKitten said:

That's correct. Well, I have been deemed 'gainfully self-employed' by the job-centre. Whatever that means. Myself and HMRC just call it 'self-employed'. I can only assume it's a tactic to confuse and obfuscate people into making errors in filling out forms and thus losing out on money they're entitled to. God knows, but yes, fully self-employed for about ten years. This time of year is generally slow, but it's highly unlikely I'd have three months of no income. One is unusual to be honest, I think we're into recession.

Gainfully self-employed usually means it's your main form of employment / source of income. You are doing it with the expectation of earning enough to support yourself. It's not a hobby where you are making occasional knick-knacks and selling them on ebay. So it differentiates someone who is (trying to) make a living from those who may have some self-employed income but are not gainfully self-employed (maybe because it's a side hustle to their main job, or it's just a hobby on the side whilst they look for a main job).

Hope that helps.

Oneplanetonelife

What happens at the end of the year if you end the business because it failed

SpikeyKitten

Oneplanetonelife said:

What happens at the end of the year if you end the business because it failed

With regards to my UC claim? I've no idea, it's all new to me. I imagine they'd just reclassify you as a 'jobseeker' and expect you to look for work.

Oneplanetonelife

SpikeyKitten said:

Oneplanetonelife said:

What happens at the end of the year if you end the business because it failed

With regards to my UC claim? I've no idea, it's all new to me. I imagine they'd just reclassify you as a 'jobseeker' and expect you to look for work.

Yes you would just report your business didn’t work out and be a jobseeker for a bit, then when they start to put pressure on you start a slightly different business and get the first year again with no min income floor