Universal Credit - self employment web forum

This forum has now closed. The deadline for comments was Wednesday 10 January 2018.


Earlier this month we did some calculations which showed that under Universal Credit, a self-employed parent of two is £300 a month worse off than an employee earning exactly the same in a year. This is because of the way Universal Credit is calculated for self-employed people whose income fluctuates month to month.

On November 29 we asked a panel of experts what were the next biggest priorities to fix Universal Credit, and they told us it’s the Minimum Income Floor and making UC work for self-employed people.

We asked for your views on the following questions:

  • What has been your experience of claiming Universal Credit as a self-employed person?
  • Have you been affected by the Minimum Income Floor? If so, how and why?
  • What changes would you make to Universal Credit for the self-employed?
  • What is the nature of your business and how long has it been operational?

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56 Responses to Universal Credit - self employment

Safia Deriche says:
December 20, 2017 at 04:41 AM
Mother to two disabled adults, one in hospital, the other in a residential College placement who has just been moved without Court Authorisation to Supported Living accommodation this week and so having to fight for his return under the Legal Aid Scheme. By the end of last year, I was evicted from our home due to this grave miscarriage of justice. I am in arrears with rent since then, it have not been paid and I am left, as a consequence, struggling to make ends meet on UC. Self-employment for me means, as I am a “regular” live-in Carer, meaning, what I earn are two weeks working, followed by one month off work. My health condition has greatly deteriorated, manual handling affects my health requiring Physio therapy, medication and GP Referral for Counselling. How much more can I cope with in my late fifties due to the failing system for care and compassion, that have failed an entire family?
Stephen M Bland says:
December 20, 2017 at 01:22 AM
The minimum income floor will destroy self-employment in the UK and lead to a huge rise in unemployment. Self-employed peoples income fluctuates, and even when working the minimum wage as per regular employment cannot be guaranteed. Universal credit was always going to destroy self-employment with the minimum income floor. If this was not planned, it beggars belief it was not noticed before.
Claudia Williamson says:
December 19, 2017 at 05:36 PM
I am not self employed.Why do I have to sign onto Universal Credit when unemployed at over 50 years of age after the employer feels to make redundancies. Surely employers should be footing unemployment benefits. If not why can't I take my personal pension that I saved by myself with Standard Life since my mid 20's that has already been taxed in wages earned? I need to know how this is just and fair please especially if I am not sick enough for the underwriters benchmark to receive my other pooled pension lodged with HSBC.
Chris Lambert says:
December 18, 2017 at 10:22 AM
Universal Credit will be a disaster for self-employed disabled people . Currently disabled people can claim working tax credits if they work 16 hours or more per week, but are unable to work full-time due to disability, and if their chances of finding a job are greatly reduced due to disability. Universal Credit removes this as everyone will have to work full-time if they are self-employed to claim it, including disabled people.

I am hoping to go back to work this year after a long period where my disability has been bad, and I have been unable to work for 5 years. Because the gap on my CV is so big, I'm concerned nobody will want to hire me. I'm hoping to be self-employed as a Web Developer, as working flexible hours from home will make it much easier to work around my disability. I won't be able to work full-time though, so I won't be able to claim Universal Credit. Under the old rules of Disabled People's Working Tax Credits this would have been possible, but Universal Credit is going to make it so much harder for me to go back to work.
Derek Steward says:
December 18, 2017 at 08:22 AM
Universal Credit is unfair for the self-employed.
Being self-employed and having a monthly MIF is making a lot of small businesses and sole traders worse of financially than an unemployed person. Therefore universal credit does not make work pay.
Having a monthly MIF does not take in to account the month by month or season by season changes in self-employed earnings.
A gardener works and earns more in spring and summer, loses benefits because if monthly profit is over MIF benefits are worked out using actual earnings. In autumn and winter work and earn less, lose benefits because benefits will be worked out using MIF even if monthly profit were get less.
A farm worker may not have any livestock or crops ready to sell, but still have outgoings to pay. Their monthly profit will be a minus figure, but benefits worked out at MIF, lose out. When they do sell something their monthly profit may be well over MIF lose out because benefits worked out using actual profit.
Having a monthly MIF does not allow self-employed people to save money for replacing/ repairing equipment, unexpected bills, slack months, illness or holidays.
Having a monthly MIF has and is causing people to close down their businesses and go unemployed.
Emma Harrison says:
December 17, 2017 at 01:25 PM
My husband is a self employed gardener, he is busy from April until the beginning of November, obviously winter months are very quiet because nothing is growing. The weather the past couple of weeks has been particularly bad with snow and ice. No work for gardeners. Usually I can claim housing benefit of £75 per week during winter months and still claim £80 in working tax credit (my husband claims it). However this year we were told that Universal credit had been rolled out in our area and we had to claim for that. On 16th November we had working tax credits stopped. My husband explained to the universal credit people that he ran a gainful business but not during winter months, but this meant that because the business was established more than 12 months ago, minimum income floor applied. On 15th December he could submit his earnings for the month. He made a loss of £32. He has been awarded £90 for the month to be paid on 22nd December. On the breakdown of the award we were entitled to £498.89 standard allowance and £320.66 housing costs. BUT BECAUSE OF MINIMUM INCOME FLOOR £660.35 HAS BEEN TAKEN OFF US ! UNIVERSAL CREDIT HAS ALREADY DECIDED MY HUSBAND HAS EARNED HIMSELF £1048 FOR THE MONTH! NO HE HASN'T! BUT WE STILL HAVE TO PAY OVER £400 EVERY MONTH IN RENT FOR THE NEXT 3 MONTHS UNTIL GARDENING SEASON STARTS AGAIN. THE SYSTEM IS AN ABSOLUTE DISGRACE.
Sarah Pratt says:
December 15, 2017 at 08:55 PM
I set up as a self employed blogger to fit work around my son as I am a single parent and he has additional needs. There are times when this can pay alot, and times where invoices aren't paid and UC is needed as a top up. The impending doom of minimum income floor has impacted on my mental health as I have to work out a way to get my business from 0 to over £1500 a month to cover my costs if I want to keep the roof over our head. I think the MIF is the worst thing to happen to small businesses and that they should be encouraged, not punished.
Ocean Love says:
December 15, 2017 at 12:16 AM
UC hasn't reached me yet but when it does, my family will be in trouble.

I'm self employed. I've been self employed for just over 2 years. I have various issues that make any other sort of employment extremely problematic.

I have two small businesses. One of them is very small and erratic. It has no scope for expanding. I do not advertise. I rely on a single listing on a national site plus word of mouth. I'm a placenta remedies specialist. When i have a placenta to process it completely takes over my very small kitchen and totally disrupts my domestic life. Therefor i can only cope with a few. Hence no scope for expanding. My income from this is therefor sporadic. UC isn't able to cope with sporadic as it doesn't average out monthly income across the year.

The other business is more regular but seasonal. I'm a face painter. In July, August, October and December i am very busy. My earnings will be high and this will negatively affect my UI. In January, February and possibly March bookings are sparse so my income won't meet the minimum income floor. Basically 4 months of the year i'll be penalised for earning too much and 3 months of the year i'll be penalised for earning too little.

UC is already less than the benefits i currently receive. We're pretty much living hand to mouth as it is. With the addition of penalties for fluctuating income, i have absolutely no idea how we will cope.

I desperately hope that UC will be altered to take an average monthly income based on yearly income before it reaches my area and completely messes up my life.
Maria McGrath says:
December 13, 2017 at 06:18 PM
I am a person who has been diagnosed with Bi-Polar disorder. I cannot be employed because I have to be able to work flexibly to fit in with my sleep patterns, moods swings and limited concentration span. Until his death, earlier this year, I had cared for my husband who had a brain tumour. I cared for him for five years after giving up my job as Head of Department in a school. The stress of being a full time carer and living on a low benefit income is what triggered my Bi-polar. I slept for only two or three hours each night before I had to be awake again to assist him with his personal needs. When he died in January of this year, I researched the possibility of becoming self employed. I make handmade Jams and Chutneys and I had many eager customer in my local seaside town. Shops were more than willing to stock my products and tourists were more than interested. However, when I looked into how much money I would receive on Universal credit, I soon realized that I would be facing financial ruin and the possibility of becoming homeless if I took this route. The hours that I would spend making my products, marketing and selling them would mean that I would not be able to make a profit equivalent to minimum wage for the hours that I work. Therefore, my meager profits of £100 per week for working twenty hours each week would actually make me significantly worse off because Universal credit automatically assumed that self employed people work for at least the minimum wage. Sadly this is not true. Therefore, I have had to abandon my business plans and I will have to remain on my current benefits. I thought this government were eager to 'make work pay' but for me, this is not the case.
Susan Rogers says:
December 11, 2017 at 04:42 PM
I set up as self employed so that I could care for my elderly parents, one with dementia, the other with MS, Leukaemia and Bowel Cancer. Neither of them wanted to go into a care home and I would not have forgiven myself if I had left them no choice but to do so. I gave up a teaching career to provide care for them. This saved the state THOUSANDS of pounds in social care costs. I, on the other hand, went from a very good wage to living month by month, not knowing whether I would be able to make ends meet. I set up as as self employed, utilising my existing skills and slowly built up a client base of people wanting me to write training resources for them. Without the Working Tax Credit - soon to be Universal Credit in my area - I would not have stayed mentally healthy enough to continue to look after the care needs of my parents. When I initially read about the base assumption that I would be treated as earning the national minimum wage - and therefore would not qualify for Universal Credit, I was distraught. People become self-employed for different reasons. I was resourceful enough to be able to become self employed as it was the ONLY WAY I could provide care for my parents. The nature of my business means that I can work during the night, fitting my work around the needs of my parents. I do not get a guaranteed monthly wage. I wish I did, but self employment doesn't work like that. I do not deliberately keep my earnings low - why would I do that? Self employed people cannot be assumed to be earning a minimum wage. There are lots of reasons why they cannot - and I hope my personal example will give you something else to think about when considering further evidence.