£0 Universal Credit Self Employed

oompapa

Firstly - apologies - I have a feeling this question will have been asked many times but I haven’t been able to find a thread that matches our situation. I would appreciate some advice to help me make sense of our recent £0 award for universal credit.

My husband and I run a business together. In general, we get by on a very low income. We have now come to end of our start up period for universal credit and have been made aware of the minimum income floor. My understanding of this was that if we earned minimum wage or less (30 hours for me and 35 for my husband) our UC allowance would be based on the minimum wage regardless. Unless we earned more, in which case it would be adjusted. We had a particularly bad month last month and I was fully prepared for an award based on minimum income. However, when we inputted our income and expenses (which ended up being less than minimum wage)  - we were awarded £0.

i am completely confused by this. Presumably this means that even if we had reached the minimum income floor then we still would’ve been awarded zero. Or is that the point? Are you expected to meet the minimum income floor in order to get universal credit? If a couple with two children earning the minimum wage or less are not eligible for UC, then I can’t think of anyone who would be except maybe single parents.

Please help me make sense of this. I do understand that UC doesn’t exist to prop up failing businesses etc etc, I just need to understand the facts so we can make a plan going forwards.

Many thanks for any advice. 

kaMelo

Now your startup period has ended, going off your 30 + 35 hours, your minimum income taken into consideration will be £3222.26 per month.

The tapered earnings deduction at 55% equals £1772. 24. 

Unless your maximum UC award is higher than £1772.24 then your UC payment will always be zero.

Caz3121

note sure if the same for self-employed but for employees if you are not claiming housing costs (rent) then I believe there is a disregard of £673 is deducted from the income before the 55% calculation which would leave £1401.95 to be deducted from your maximum award. It is possible that your maximum award could be lower than that if no housing or disabilities

kaMelo

The work allowance rules are the same whether employed or self-employed. I should have added that caveat to the calculation I gave but that is not the only one.

It would be helpful if the OP could lay out their circumstances and their UC calculation to see whether it was correct or not.

oompapa

kaMelo said:

The work allowance rules are the same whether employed or self-employed. I should have added that caveat to the calculation I gave but that is not the only one.

It would be helpful if the OP could lay out their circumstances and their UC calculation to see whether it was correct or not.

Thank you very much. We have two children but no child care costs and have a mortgage so no rent allowance. No disabilities. So am I right in assuming that nobody gets UC as presumably everyone in work earns at least minimum wage and everyone in business is assumed to be earning minimum wage. This is where my confusion lies - why does UC exist if no one can actually claim it? I feel like I must be missing something really obvious here - so forgive me if I’m coming across as stupid!

Many thanks again for replying.

oompapa

Caz3121 said:

note sure if the same for self-employed but for employees if you are not claiming housing costs (rent) then I believe there is a disregard of £673 is deducted from the income before the 55% calculation which would leave £1401.95 to be deducted from your maximum award. It is possible that your maximum award could be lower than that if no housing or disabilities

No rent (mortgage) and no disabilities so looks like we’ll get nothing. Thank you for replying. I appreciate it. 

Spoonie_Turtle

oompapa said:

kaMelo said:

The work allowance rules are the same whether employed or self-employed. I should have added that caveat to the calculation I gave but that is not the only one.

It would be helpful if the OP could lay out their circumstances and their UC calculation to see whether it was correct or not.

Thank you very much. We have two children but no child care costs and have a mortgage so no rent allowance. No disabilities. So am I right in assuming that nobody gets UC as presumably everyone in work earns at least minimum wage and everyone in business is assumed to be earning minimum wage. This is where my confusion lies - why does UC exist if no one can actually claim it? I feel like I must be missing something really obvious here - so forgive me if I’m coming across as stupid!

Many thanks again for replying.

Lots and lots of people rent, lots have childcare costs, have disabled children and/or are disabled themselves, and/or care for someone (else) who's disabled.  Each of those circumstances mean extra elements in the maximum UC award which means there's some left over after deductions for earnings are made. 

Not everyone in work is in full-time work, and if someone is self-employed but has a health condition affecting their ability to work and/or is a carer for a disabled person, they cannot be deemed to be gainfully self-employed so the MIF won't apply to them (they'll still report their income and expenses but their UC will be calculated based on actual earnings).

https://www.gov.uk/universal-credit/what-youll-get 

peteuk

oompapa said:

kaMelo said:

The work allowance rules are the same whether employed or self-employed. I should have added that caveat to the calculation I gave but that is not the only one.

It would be helpful if the OP could lay out their circumstances and their UC calculation to see whether it was correct or not.

Thank you very much. We have two children but no child care costs and have a mortgage so no rent allowance. No disabilities. So am I right in assuming that nobody gets UC as presumably everyone in work earns at least minimum wage and everyone in business is assumed to be earning minimum wage. This is where my confusion lies - why does UC exist if no one can actually claim it? I feel like I must be missing something really obvious here - so forgive me if I’m coming across as stupid!

Many thanks again for replying.

UC is there to help those who are not working full time and so not earning the minimum/living wage.  Those who cant work or who are limited in their capcity to work. Those who are currently not working. 

It helps provide those claimants various additional help, housing, child care ect. 

In your case you had a years start up where you were allowed to earn any amount and claim.   UC is not there to prop up your flagging self employment. If you have earnt nothing from it this assessment period then I would consider it might be time to do something else. Or its time to look at the good periods to protect the bad.  Either way what ever you are entitled to via UC is obviously being zero'd by the minimum floor.  This is due to your circumstance eg married, home owner etc 

oompapa

peteuk said:

oompapa said:

kaMelo said:

The work allowance rules are the same whether employed or self-employed. I should have added that caveat to the calculation I gave but that is not the only one.

It would be helpful if the OP could lay out their circumstances and their UC calculation to see whether it was correct or not.

Thank you very much. We have two children but no child care costs and have a mortgage so no rent allowance. No disabilities. So am I right in assuming that nobody gets UC as presumably everyone in work earns at least minimum wage and everyone in business is assumed to be earning minimum wage. This is where my confusion lies - why does UC exist if no one can actually claim it? I feel like I must be missing something really obvious here - so forgive me if I’m coming across as stupid!

Many thanks again for replying.

UC is there to help those who are not working full time and so not earning the minimum/living wage.  Those who cant work or who are limited in their capcity to work. Those who are currently not working. 

It helps provide those claimants various additional help, housing, child care ect. 

In your case you had a years start up where you were allowed to earn any amount and claim.   UC is not there to prop up your flagging self employment. If you have earnt nothing from it this assessment period then I would consider it might be time to do something else. Or its time to look at the good periods to protect the bad.  Either way what ever you are entitled to via UC is obviously being zero'd by the minimum floor.  This is due to your circumstance eg married, home owner etc 

I was waiting for the ‘not there to prop up your flagging self employment’ comment. I really just needed the facts not belittling judgement. Our business is doing ok most of the time. We’re not well off but we’re ok with that at the moment. And I agree that the government should not ‘top up’ what we don’t earn that we could as an employee, I just wanted to make sure I understood everything correctly and hadn’t missed something.

Thanks for our clairification. Appreciated. 

Spoonie_Turtle

peteuk said:

oompapa said:

kaMelo said:

The work allowance rules are the same whether employed or self-employed. I should have added that caveat to the calculation I gave but that is not the only one.

It would be helpful if the OP could lay out their circumstances and their UC calculation to see whether it was correct or not.

Thank you very much. We have two children but no child care costs and have a mortgage so no rent allowance. No disabilities. So am I right in assuming that nobody gets UC as presumably everyone in work earns at least minimum wage and everyone in business is assumed to be earning minimum wage. This is where my confusion lies - why does UC exist if no one can actually claim it? I feel like I must be missing something really obvious here - so forgive me if I’m coming across as stupid!

Many thanks again for replying.

UC is there to help those who are not working full time and so not earning the minimum/living wage.  Those who cant work or who are limited in their capcity to work. Those who are currently not working. 

Actually it's there for anyone the government deems to be on a low income relative to their circumstances, without other means to support themselves (pension income, savings/capital).  This includes people who work full-time and are still entitled to some financial support via UC.

peteuk

oompapa said:

peteuk said:

oompapa said:

kaMelo said:

The work allowance rules are the same whether employed or self-employed. I should have added that caveat to the calculation I gave but that is not the only one.

It would be helpful if the OP could lay out their circumstances and their UC calculation to see whether it was correct or not.

Thank you very much. We have two children but no child care costs and have a mortgage so no rent allowance. No disabilities. So am I right in assuming that nobody gets UC as presumably everyone in work earns at least minimum wage and everyone in business is assumed to be earning minimum wage. This is where my confusion lies - why does UC exist if no one can actually claim it? I feel like I must be missing something really obvious here - so forgive me if I’m coming across as stupid!

Many thanks again for replying.

UC is there to help those who are not working full time and so not earning the minimum/living wage.  Those who cant work or who are limited in their capcity to work. Those who are currently not working. 

It helps provide those claimants various additional help, housing, child care ect. 

In your case you had a years start up where you were allowed to earn any amount and claim.   UC is not there to prop up your flagging self employment. If you have earnt nothing from it this assessment period then I would consider it might be time to do something else. Or its time to look at the good periods to protect the bad.  Either way what ever you are entitled to via UC is obviously being zero'd by the minimum floor.  This is due to your circumstance eg married, home owner etc 

I was waiting for the ‘not there to prop up your flagging self employment’ comment. I really just needed the facts not belittling judgement. Our business is doing ok most of the time. We’re not well off but we’re ok with that at the moment. And I agree that the government should not ‘top up’ what we don’t earn that we could as an employee, I just wanted to make sure I understood everything correctly and hadn’t missed something.

Thanks for our clairification. Appreciated. 

It’s not my judgement it’s UCs judgement.  Its factual as in the minimum floor is there to ensure that those who are self employed do so to a standard of living,  because if they didn’t wed all be self employed and claiming UC.  Six £0 assessment periods and your UC claim will stop.

UC looks at monthly assessment periods, so what happens if your self employment is seasonal?  UC will suggest you find a job to bolster your income,Spoonie_Turtle said:

peteuk said:

oompapa said:

kaMelo said:

The work allowance rules are the same whether employed or self-employed. I should have added that caveat to the calculation I gave but that is not the only one.

It would be helpful if the OP could lay out their circumstances and their UC calculation to see whether it was correct or not.

Thank you very much. We have two children but no child care costs and have a mortgage so no rent allowance. No disabilities. So am I right in assuming that nobody gets UC as presumably everyone in work earns at least minimum wage and everyone in business is assumed to be earning minimum wage. This is where my confusion lies - why does UC exist if no one can actually claim it? I feel like I must be missing something really obvious here - so forgive me if I’m coming across as stupid!

Many thanks again for replying.

UC is there to help those who are not working full time and so not earning the minimum/living wage.  Those who cant work or who are limited in their capcity to work. Those who are currently not working. 

Actually it's there for anyone the government deems to be on a low income relative to their circumstances, without other means to support themselves (pension income, savings/capital).  This includes people who work full-time and are still entitled to some financial support via UC.

Please note I did go further and suggest that their circumstances or lack of (housing ect) hat gives them a basic UC payment.