self employed stop paying UC after 12 months

cookie111

hi,
Is it correct that our payments stop completely after 12 months.
myself & my wife both have small businesses & both have struggled to get things back up & running since lockdown.
ive run my business over 30years & its had its ups & downs. 
So i went in to UC & they said thats it youve had your 12months & we use your minimum income floor as your income if you dont reach it. & said if you both get that or above you wont get UC anyway, We have an 11 year old daughter, so things are getting a bit tight financially.
i was just wondering is this correct or do i need to speak to someone.
thanks.

Rubyroobs

After a year they will assume you are meeting the minimum income floor and treat you as if you do. This may or may not result in no UC being paid depending what your total UC award is. 

peteuk

The minimum income floor is 35 x minimum wage (minus an expected tax and NI contributions). If you earn less than this as self employed then regardless of what you do earn UC will apply this as a wage.

UC is reduced by 55p for every pound you earn, so regardless of how much your self employed income is, both you and your wife will have the MIF applied if you earn less than the MIF and that now you've had the 12 month start up period.  

Im therefore assume that 2X MIF zero’s your UC claim.

If you’re struggling then it might be time to look for work else where.

NB 35 is the amount of hours worked this will vary if you have a disability or caring responsibilities. 

Spoonie_Turtle

If using your Minimum Income Floors results in an earnings deduction higher than your maximum UC award then yes, it would be correct that you receive 0.

The only way that will change is if you either have a change of circumstances that results in a higher maximum UC award, or if one/both of you are reassessed and no longer classed as gainfully self-employed which would mean you (whomever is reassessed) become a jobseeker and no longer have the MIF applied.

Yamor

Assuming neither of you are disabled or a carer, or have a reduced number of 'expected hours' for any other reason, then your combined 'Minimum Income Floor' would be £3,089.67.
(That is based on one of you would have a MIF based on 35 hours, and the other 30 hours due to your child.)

This is easily enough to reduce your award to nil if all you were entitled to was the standard allowance for a couple and the child element. Is that the case?

cookie111

So all self employed people get zero payments...

Rubyroobs

cookie111 said:

So all self employed people get zero payments...

It depends on their award really. As you have two of you working and so two lots of minimum income floor applied, and you only have one child then this will likely give you zero award. Someone else paying a high rent or with multiple children could like receive some UC.

sheramber

cookie111 said:

So all self employed people get zero payments...

Not if they are earning at least the MIF and their amount if UC is more  than  that. 

They will get a payment iof the balance  when MIF is deducted from their award. 

In your case there is nothing left over. 

Each case is calculated on their individual 
circumstances. 

peteuk

cookie111 said:

hi,
Is it correct that our payments stop completely after 12 months.
myself & my wife both have small businesses & both have struggled to get things back up & running since lockdown.
ive run my business over 30years & its had its ups & downs. 
So i went in to UC & they said thats it youve had your 12months & we use your minimum income floor as your income if you dont reach it. & said if you both get that or above you wont get UC anyway, We have an 11 year old daughter, so things are getting a bit tight financially.
i was just wondering is this correct or do i need to speak to someone.
thanks.

So you had small business since pre Covid and struggled post lockdown, you’ve had a years start up with UC and now because your still struggling the MIF has been applied.  UC isn’t there to prop up your failing business, it’s to support you.  Take it as a hint, if your business isn’t supporting you time to look for employment.  Easier said than done I know and your circumstances haven’t been explored.  But since lockdown in 2022, your had two businesses and it has failed to provide an income for you and your family.

TELLIT01

If the business doesn't provide an income of at least the MIF after 12 months it is likely to be viewed as not being a viable business by DWP.  In that situation the only option would be to claim UC as unemployed and start going along the Job Search route.  

I believe that to be the case anyway.

huckster

Once the MIF is applied and there are 6 monthly assessments with zero payments due, the claim will get closed down. Or if the claimants in this situation  don't bother completing income and expenses information, because it is not worth doing so, then after 1 month of the information not being provided, the claim will get closed down.

I find that Self-employed in this situation don't want to close their self-employment down and look for normal employment. They would rather not get UC and try to increase their Self-employed income to make up for any UC not being received.

DWP won't just decide after 10 or 11 months of the start up period that the claimant is not gainfully Self-employed because the net income is below MIF.  The Job Centre Work Coach will just remind about the date the MIF is due to apply and suggest that the claimants look at their financial situation. I.e. could they afford receiving reduced amount or zero from UC. And ask about what steps they are taking to increase net income. 

In most areas of the country there are free advice services that help the Self-employed. Details may be found on your local Council Authorities website.