Universal Credit for Self-Employed Workers Explained
The COVID-19 pandemic has changed the entire focus of British society and the wider economy. Government intervention has been unprecedented. However, for many self-employed tradespeople and freelancers, jobs will be drying up and money getting tight. For those unable to access the Government’s generous self-employed income support scheme, UC will be their only alternative means of support. Benefits have always been difficult to access for the self-employed. However, thanks to new changes to the minimum income floor, self-employed workers can now access Universal Credit to help top up their income during these precarious times.
Our Guide to Accessing Universal Credit
The basics… To get access to Universal Credit you will need to evidence that self-employment is your MAIN source of income. Your self-employment income prior to this was regular and your administration is organised – receipts and accounts and you make a profit. If you can illustrate these four key points you can, therefore, showcase to the Universal Credit workers at the jobcentre that you meet the minimum criteria of being “gainfully self-employed” and as such you can access Universal Credit.
What Will You Get?
If you are deemed as being “gainfully self-employed” whilst being a recipient of Universal Credit you will therefore not be asked to look for work or be available for other work. The purpose of this is to help self-employed business owners and tradespeople to continue to build their business into a post-Pandemic success.
However, you won’t be earning what you’re currently used to earning. It will be assumed that you are earning the same as someone in paid work. This will be calculated to mean someone who is the same age as you and their National Minimum wage for the totality of the hours of work you are expected to work for or look for work. This is what UC calls the Minimum Income Floor.
In terms of understanding the Minimum Income Floor and how it impacts you, one needs to understand this reality – if your income is less than the MIF then UC will not make up any of the lost difference. You will need to find additional income from a second job or income source. However, if you earn a greater amount than the Minimum Income Floor, UC will make payments relating to your earnings. However, for start-up freelancers, the Minimum Income Floor will not be applied for the first 12 months. This period of UC is called the “start-up” stage. During this period, you will be given free reign to build up your business without the need to earn extra income. You will work alongside your Job Coach to help build your business. If you are forced to stay at home due to Coronavirus, the Minimum Income Floor will not be applied to your situation.
But Didn’t The Chancellor End The Minimum Income Floor?
However, from April 6th, 2020, the Minimum Income Floor is being relaxed temporarily. This means all the MIF won’t apply to new UC claimants during the COVID-19 pandemic. Furthermore, new applicants will no longer be demanded to attend a jobcentre interview to “demonstrate gainful self-employment”. You will also need to report all earnings from self-employment to the Department of Work and Pensions every single month.
At Prestige Business Management we can help. Our clients understand we go that extra mile and in the current uncertain times we live in we can help by providing stability and support. Why not get in touch with Prestige Business Management today on 0203 773 2927. Why not call us today to talk about Universal Credit and its impact on self-employment?