Universal Credit - Self Employed

TheInquisitor

Just looking for a little clarity if someone can help.

I am self-employed and claiming UC. I had my initial year start-up period which has now ended and the MIF has been applied.

They work out my UC based on £1,642.72 - which means if I don't earn more than that I get nothing.

Work is slow for a graphic designer so I don't often earn that much. However if, by luck or good management I earn say £1,700 one month they work out my UC based on that amount.

But every £1.00 I earn in take-home pay reduces my Universal Credit by 55 pence - which is £935.00.

Which means they'll reduce the standard allowance which I'm entitled to of £400.14 by £935.00.

Which means I get nothing.

So essentially I'll never get any financial assistance from UC while self-employed.

Have I got that correct?

poppy12345

Yes that is correct, what ever your earnings your UC will reduce to zero. This is because your maximum IC entitlement before deductions is low. 

Spoonie_Turtle

poppy12345 said:

Yes that is correct, what ever your earnings your UC will reduce to zero. This is because your maximum IC entitlement before deductions is low. 

This is the key part, OP.  It's not that there's no help for self-employed people in general, it's that there's no help for self-employed people in your exact circumstances.  Someone with a higher UC entitlement because of different circumstances would still be entitled to some help even with the MIF in place. 

With a max UC entitlement of £400.14, your payment is nilled by earnings of more than £727.52 (which is the equivalent of 13.75hrs per week at minimum wage). 
If you were not self-employed and were earning that level they would be expecting you to be looking for more work and require proof of such at regular jobcentre appointments.

NedS

TheInquisitor said:

Just looking for a little clarity if someone can help.

I am self-employed and claiming UC. I had my initial year start-up period which has now ended and the MIF has been applied.

They work out my UC based on £1,642.72 - which means if I don't earn more than that I get nothing.

Work is slow for a graphic designer so I don't often earn that much. However if, by luck or good management I earn say £1,700 one month they work out my UC based on that amount.

You've had a year, supported by the tax payer (UC), to build your business to the point where you can earn enough to support yourself (the purpose of the start up period)

What steps have you taken, and what more could you reasonably do?

If you are unable to increase your S/E earnings to the point you are able to support yourself, you may like to consider a part time job to provide some extra income. Many people work part time (or even full time) whilst building up a business to the point at which it is able to support them.

TheNorthStar

Try promoting your graphic design business on Fiver. It's a way to introduce yourself to new clients.

huckster

I have come across quite a few graphic designers who struggle to earn a living. Too many graphic designers and not enough clients with budgets?

As always, if the market is no longer there or not enough consumers, then you need to move to a trade/profession where you can earn a living.

There are cases I have become aware of, where some are so pigheaded in pursuit of a particular career choice, they have resorted to going to foodbanks and some ended up homeless on the streets. 

There is a choice after a 12 month start up period when the MIF applies. Give up self employment as main employment. Get an employed job for over 50% of your available hours and treat graphic design as a secondary long term project that you are working on. If you continue any self employment as secondary work you would still need to report income and expenses.

Yamor

huckster said:

There is a choice after a 12 month start up period when the MIF applies. Give up self employment as main employment. Get an employed job for over 50% of your available hours and treat graphic design as a secondary long term project that you are working on. If you continue any self employment as secondary work you would still need to report income and expenses.

I've always thought it is very unfortunate that it isn't really possible for a jobseeker to continue with any self-employed work on the side without being hit by the MIF.
I've seen a number of claimants who have given up their 'side gig' because of the MIF, despite their intention never being for the self-employed work to become their main job, and who would have been perfectly happy to comply with all the normal conditionality rules applied to jobseekers.

Originally, the plan was for the UC Regs to state clearly that if the self-employed work occupied no more than half of a claimant's expected hours, then they were not to be treated as gainfully self-employed (see reg. 57(2) here, for example: https://assets.publishing.service.gov.uk/media/5a7c27a7ed915d0b036b5605/uc-draft-regs-2012.pdf ).
But then they took out that provision, and left it up to the discretion of the work coaches, and despite the guidance stating that it is possible to be found to be not gainfully self-employed by virtue of working only very few hours on the self-employment, the default position is that you will be found to be gainfully self-employed unless the work is really minimal.

huckster

The difficulty for Work Coaches and UC in moving a claimant from gainful self employment with MIF to non gainful self employment without MIF, just because a claimant has started some employed work ( over 50% of available hours), is that often a claimant still prioritises self employment over employed.  Then the question arises, does a new decision need to be made to find the claimant gainfully self employed again and apply the MIF immediately. 

For the above reason, I can see some Work Coaches refuse to end gainful self employment and remove the MIF, unless the claimant totally gives up self employment. Was that the intention of legislators?

NedS

Yamor said:

huckster said:

There is a choice after a 12 month start up period when the MIF applies. Give up self employment as main employment. Get an employed job for over 50% of your available hours and treat graphic design as a secondary long term project that you are working on. If you continue any self employment as secondary work you would still need to report income and expenses.

I've always thought it is very unfortunate that it isn't really possible for a jobseeker to continue with any self-employed work on the side without being hit by the MIF.
I've seen a number of claimants who have given up their 'side gig' because of the MIF, despite their intention never being for the self-employed work to become their main job, and who would have been perfectly happy to comply with all the normal conditionality rules applied to jobseekers.

That was never the intention, but as @huckster says, often the claimant is content to mosey along with a little self-employment and isn't then fully motivated to also look for paid employment and increase their earnings.

It's up to the claimant to demonstrate their availability and that they are actively seeking employment if they are not gainfully self-employed.

I do think that often it is easier for a WC to just leave the MIF in place, rather than have to pursue a decision for availability or actively seeking employment, especially where DMs are sometimes reluctant to sanction where there are some earnings, which just reinforces the message to the claimant that it is OK to just mosey along.

Something that is clearly a 'side gig' should never have been classed a GSE in the first place. Either it's GSE and the claimant is committed to developing it from a 'side gig' to 'can provide an income equivalent to the MIF' in the start up year, or they commit to actively seeking full time employment (which can include the side gig income). If they are committed to developing it, then after the start up period either the MIF applies or they end the business and look for a job. They can't have it both ways and use it to circumnavigate the MIF. The reason they've had to give up their 'side gig' is either that they have failed to develop it in the start up year or that they did not want to look for a job.