New enterprise allowance & UC help

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Redsquirrell1
Redsquirrell1 Posts: 4 Newbie
in Benefits & tax credits
Hi , I’ve recently set up a very small business and I’m claiming the NEA and also UC . After some confusion it appears that I’m being deducted money from my UC for any earning I make , This was never explained at any point during the ‘ training period ‘ .Although I’ve accepted this , my main concern now is , I’ve been off work for a few days due to illness , How is this going to impact my UC and my NEA payment ? Also when the 26 week period ends what happens then ? I’ve tried discussing with various people at gov site but no one seems to be very UP on what happens next ; I’m certainly not going to live on the small wage I’m currently earning .
Any advice please

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  • calcotti
    calcotti Posts: 15,696 Forumite
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    My understanding is that NEA is in addition to UC. However earnings are taken into account when working out your UC entitlement, 63% of the earnings are deducted from the maximum UC amount that would otherwise be payable. UC will continue as long as you are on a low income. However after 12 months the DWP can apply the Minimum Income Floor which assumes that are earning at least the equivalent of 35 hours x NMW even if you are actually earning less.

    https://www.turn2us.org.uk/Benefit-guides/Universal-Credit-income-and-capital/Self-employed-earnings

    https://www.citizensadvice.org.uk/benefits/universal-credit/on-universal-credit/how-the-minimum-income-floor-works-if-youre-self-employed/
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • Redsquirrell1
    Redsquirrell1 Posts: 4 Newbie
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    Ok thank you , complete nightmare being on NEA
  • WhenIam64
    WhenIam64 Posts: 1,052 Forumite
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    complete nightmare being on NEA

    Don't lose heart. Have a look at your plan and see if you can increase your turnover. Lots of new businesses fail in the first year. You only have to look at new restauants in your town to see.

    Did you get anyone to look at your business plan beforehand. Can you get them to look at it again / check it to see if there is something simple you are missing.

    NEA is a sort of safety net which is effectively withdrawn after a year by the application of the NMW floor - saves people from continuing when a market is not there or they can't access it.

    Take a deep breath and look at your plan and ask lots of people for advice. Once you get the same answer repeated again and again, you'll know the route to take.
    Unlike some here, I am not omniscient. If I am wrong correct me. I won't take offence.

    The law is like an ocean - have a swim but don't drown.
  • calcotti
    calcotti Posts: 15,696 Forumite
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    WhenIam64 wrote: »
    Don't lose heart. Have a look at your plan and see if you can increase your turnover. Lots of new businesses fail in the first year. You only have to look at new restauants in your town to see.

    Did you get anyone to look at your business plan beforehand. Can you get them to look at it again / check it to see if there is something simple you are missing.

    NEA is a sort of safety net which is effectively withdrawn after a year by the application of the NMW floor - saves people from continuing when a market is not there or they can't access it.

    Take a deep breath and look at your plan and ask lots of people for advice. Once you get the same answer repeated again and again, you'll know the route to take.

    Two different things here. I thought the NEA was a start up weekly allowance which is paid over 26 weeks. This is different to the start up period for UC which defers the application of the MIF.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • Redsquirrell1
    Redsquirrell1 Posts: 4 Newbie
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    Hi , I’m literally knocking on peoples doors to get it going
    my plan is to get off any benefits ( isn’t it everyone’s ) , I’m only 10 weeks in but do feel like I’m been left floundering 🐟 and with no income earnt from being off sick 🤢 I’m totally at a loss as to whether my UC is going to dip for that period or my nea payments - which basically are making up the drop in my UC deductions ,
  • calcotti
    calcotti Posts: 15,696 Forumite
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    A few days of sickness does not affect your UC claim. If, as a result, when you provide your monthly figures you have earned less there will be less to deduct from the maximum amount payable and your UC payment for the period willl be higher.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • Redsquirrell1
    Redsquirrell1 Posts: 4 Newbie
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    Thank you , huge relief to hear that ��
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