Self Employed

 Already getting Universal Credit?

If you are already getting Universal Credit as a self employed worker, and your income has dropped, you will have that drop in income taken into account when your Universal Credit is next assessed.

You should continue to report your income and allowable expenses to the DWP as normal, even if you are reporting a loss.

You should let your Work Coach know what is going on as soon as possible and if you have to agree to a new Claimant Commitment make sure you agree to this online within 7 days.

It’s worth making a claim for Council Tax Support, and – if you have school age children – looking to see if you could get free school meals.
See Need extra financial help? for more information.

If you have received a lump sum payment from the Self-Employed Income Support Scheme, then see below for how this will affect your Universal Credit award.

Example:
Halina is a self-employed gardener. She was already on Universal Credit when the Coronavirus outbreak meant she could no longer work. She’s been reporting her income and allowable expenses to the DWP every month. She’s not made any profit since February, and so her Universal Credit payments have increased to reflect this.

Minimum Income Floor

The Minimum Income Floor has been suspended for all self-employed workers affected by the Coronavirus. This means that regardless of how long a self-employed person has been trading, their Universal Credit award will be based on their actual takings (if they have any).
See What if I’m self-employed? for more information about the Minimum Income Floor.

Example:
Gareth is a self-employed painter and decorator. He made a new claim for Universal Credit in April when he had no more income due. He’s been trading for 10 years, so normally the Minimum Income Floor would mean the DWP would assume he was earning a minimum level of income – but as this is currently suspended his Universal Credit has been based on his actual earnings instead.

Self-Employed Income Support Scheme

If you are self-employed and your income has been affected by the Coronavirus outbreak then you may have received a grant from the Self-Employed Income Support Scheme (SEISS).

The government made these payments in May to cover the three month period March, April and May; and they will be making a further payment in August to cover June, July and August.

If you are already getting Universal Credit or made a claim for it in the month before receiving the grant, then the DWP will take account of this payment as earnings for the Assessment Period in which it is paid.

This means it is not being counted as earnings over a three month period – but just for the Assessment Period in which it is received. So, as long as you report it in that Assessment Period, you will not have been overpaid Universal Credit.

NOTE: If you reported a loss in any previous Assessment Periods then those losses can be offset against the grant – meaning that less grant will be taken into account as income when your Universal Credit award is assessed.

For some claimants already on Universal Credit, the grant payment will reduce their Universal Credit award to nil for the Assessment Period that it is included.

If this happens to you, and your income is likely to stay low for a while, you should check that the DWP keep your claim open and continue to assess your entitlement to Universal Credit, although you may be affected by the ‘surplus earnings’ rules.
See What are the surplus earnings rules? for more information.

Example:
Tyrone is a self-employed photographer. He made a new claim for Universal Credit in March when he realised he was not going to be able to continue his business as normal. He received his Self-Employed Income Support Scheme grant of £4,690. This was included as earnings when his Universal Credit was assessed meaning that- he got no Universal Credit that month. He was worried about whether he would be affected by the surplus earnings rules, so he booked an appointment to speak to a Benefits Adviser about it.

IMPORTANT: If your Universal Credit award reduces to nil due to the Self-Employed Income Support Scheme grant, then you should ensure your Universal Credit continues to be reassessed every month – as this will then reduce the amount of the surplus earnings carried forward – until you receive an award again (assuming your earnings are low enough).

Already getting Tax Credits and/or Housing Benefit?

If you are already getting some Tax Credits and/or Housing Benefit you may be able to stay on those benefits, but you could be better off if you claim Universal Credit if you are eligible. You should seek advice from a Benefits Adviser who will be able to conduct a better off calculation.

NOTE: If you have £16,000 in capital/savings then you will not be entitled to Universal Credit – and, if you do claim it, then it is extremely unlikely that you would be able to go back to Tax Credits.

Not currently getting any means-tested benefits?

As long as you meet the general eligibility criteria for Universal Credit then you can make a claim for it.
See Who can get Universal Credit for more information.

Whether you are entitled or not, and how much you are entitled to, will depend on your personal circumstances and income.
See How Much – the basics for more information.

Timing of the claim may be an issue if you are due some payments into your business or a payment from the Self-Employment Income Support Scheme – speak to a Benefits Adviser before making your claim.

Frequently Asked Questions:

WARNING: There are many scams…..people trying to get you to tell them your bank account details. If you receive a call from someone saying they work for the DWP and asking for your bank account details, ask the caller to post a specific form of words into your Universal Credit journal so you can be sure it’s them.

The DWP regularly produce guidance or introduce new measures that may change the information on these pages. Please check back regularly for updates on the arrangements the DWP is making to support those who are affected by Coronavirus.