Employed/self-employed while claiming Universal Credit

Universal Credit when you are starting work, already in work or when you are self-employed.

How often your employer pays you can affect your Universal Credit

If you’re paid once a month on the same date and nothing changes in your earnings, then your Universal Credit amount should stay the same.

Your Universal Credit payment is based on an assessment period which is a period of one calendar month. At the end of each assessment period, a claimant's Universal Credit for that month is calculated. The first assessment period starts when the claimant makes their Universal Credit claim.

If you’re paid weekly, every two weeks, or every four weeks, you’ll receive more than one payment of your wages during some Universal Credit assessment periods. If you are paid monthly there may be times when you receive two payments of your wages in a Universal Credit assessment period.

For example: 

  • monthly - there may be times in a year when you will receive two sets of wages in an assessment period e.g. if you are paid on the last Friday of the month, you may receive two sets of wages in an assessment period.

  • every four weeks - once a year, you’ll get two sets of wages in one assessment period

  • every two weeks - twice a year, you’ll get three sets of wages in one assessment period

  • every week - four times a year, you’ll get five sets of wages in one assessment period.

If you get more than one payment of your wages during an assessment period, this means that your earnings might be too high for you to get Universal Credit for that assessment period.

You will be told if your wages are too high for Universal Credit within that assessment period and if you’ll need to reapply to continue to get Universal Credit.

Starting work

If you receive Universal Credit and start work you will need to tell the Department for Communities who your employer is. This will make sure you receive the right amount of Universal Credit because as your pay changes, the amount of Universal Credit you receive changes too.

You will not need to close your Universal Credit claim just because you have started work.

Already in work

If you already work, earning as much as can be expected and are still eligible for Universal Credit, you will receive financial support without having to increase your earnings.

If you are working but could earn more, you will be supported while you look for extra work or better paid work.

Becoming financially independent

Once you earn enough money through work and have become financially independent, you will no longer need Universal Credit and your claim will close. The Department for Communities will tell you if this is the case.

If your circumstances change and you need to come back onto Universal Credit within six months of your previous claim ending, it is easy to do so through the reclaim function in your online account.

Self-employment

Payments made through the Self-Employment Income Support Scheme will be treated as earnings in Universal Credit. This means payments will be taken into account in the Assessment Period in which they are received. In this way Universal Credit provides support as your earnings change.

Self-employed people can claim Universal Credit.

If you are self-employed and claiming tax credits or Housing Benefit, and you have a change in circumstances, you may move to Universal Credit.

If you are self-employed but also employed, the Department for Communities will make a decision about which activity is your main occupation as part of a ‘gainful self-employment test’.

Gainful self-employment

To count as gainful, your self-employment must be organised, developed and regular, and you must expect to make a profit. It should also be your main job.

You will need to go to a ‘gateway interview’. At the gateway interview, you’ll need to provide evidence of your self-employed activity, for example your business plan, copies of invoices and receipts, or trading accounts from the previous year.

If the Department for Communities decides you are not gainfully self-employed, you’ll need to look for and be available for other work. You will still need to report any earnings from your self-employment so they can be taken into account when calculating your Universal Credit.

Minimum Income Floor

To work out your Universal Credit payments, it is assumed you earn at least the ‘Minimum Income Floor’, even if your actual earnings fall below it.

Your Work Coach will be able to explain how your Minimum Income Floor is calculated. 

If you earn more than the Minimum Income Floor you will receive less Universal Credit.

COVID-19

From 6 April 2020, the Minimum Income Floor will be temporarily relaxed and will last for the duration of the outbreak.

You will not need to attend the Jobs & Benefits office to demonstrate gainful self-employment.

Exemptions from the Minimum Income Floor

If the Minimum Income Floor doesn't apply to you, your Universal Credit payments will be calculated on your actual income rather than your assumed income.

Start-ups

If your business is less than 12 months old, the Minimum Income Floor won’t apply to you for one year. During this time your actual earnings will be taken into account to work out your Universal Credit.

If you have a disability or health related condition

If you’re a self-employed person with a disability or lone parent and in any of the groups listed below, the Minimum Income Floor won’t apply:

  • no work-related requirements group
  • work-focused interview group
  • work preparation group

Your Work Coach will be able to tell you if you are in one of these groups.   

Your work coach

As part of your claim you will need to accept your ‘Commitment’. You will create and agree this with your Work Coach.

Your Commitment will set out the tasks you have agreed to do to prepare for work, look for work or increase your earnings. This may include:

  • going to interviews in your local Jobs & Benefits office
  • preparing a CV
  • going on a training course or employment programme
  • applying for jobs
  • registering with a recruitment agency

The tasks you agree to will depend on things such as your health, your responsibilities at home and how much help you need to get to work or to increase your income. Your Commitment will be reviewed on an ongoing basis.

Reporting your income 

You must report your earnings from self-employment every month through your online Universal Credit account or by telephoning the Universal Credit Service Centre.

Find out more about how to calculate your income for Universal Credit at the following page:

Expenses

If your expenses for a particular month are unusually high, you can’t offset them against your income in future months. This applies even if your expenses for the month are higher than your receipts.

Business start-ups

If you’re classed as gainfully self-employed and your business is less than 12 months old you will not have to look for other paid work. However, you will have to go to an interview every three months to prove you are still gainfully self-employed and taking steps to increase your earnings.

Make a claim to Universal Credit

To claim, you must create a Universal Credit account online:

Information videos

A series of videos help explain the key stages in the Universal credit customer journey.

If you use sign language,  you can watch these videos in British or Irish Sign Language at the links below and follow the link on the page to the relevant video numbered 1-9:

Help and Support

If you would like independent help and advice on Universal Credit or any of the other welfare changes, you can visit any independent advice office or contact:

More useful links

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