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Universal Credit minimum income floor rules to change next month as DWP unveil plans

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Universal Credit can be claimed for by self-employed people who are struggling and need help supporting their business. Self-employed claimants are usually assessed by minimum income floor rules but these were altered as coronavirus emerged.

Usually, the minimum income floor is what the DWP expect self-employed claimants to earn each month but it is not what is actually earned.

The amount will be different for each person because not everyone will be expected to work the same number of hours, with the DWP calculating the minimum income floor by multiplying the national minimum wage with the number of hours the self-employed claimant agreed to work with a work coach.

However, to bring a level of stability in for self-employed claimants, the government temporarily changed minimum income floor rules earlier on in the year and claimants will now have their payments based on their actual earnings as opposed to expected earnings.

This change is set to be revered next month and this was recently addressed in Parliament.

READ MORE: Pension: DWP release plans on simplifying statements

If the minimum income floor rules are reverted to their previous set up, self-employed claimants could see their Universal Credit payments drop.

To be eligible for Universal Credit while being self-employed, the claimant will need to show that:

  • self-employment is their main job or their main source of income
  • they get regular work from self-employment
  • their work is organised – this means they have invoices and receipts, or accounts
  • they expect to make a profit

If a self-employed claimant earns more than £2,500 over the monthly amount they can earn before they receive no Universal Credit payment, they are said to have surplus earnings.

This may reduce the amount of Universal Credit that can be received in later months.

However, if the claimant makes a loss in one month, the loss will be stored and taken into account in months where they make a profit.

If the profits are not high enough to fully cover a loss, the remaining loss will be carried forward to the next month when the claimant makes a profit.



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