Information about Universal Credit for self-employed people who are currently unable to work as a result of Coronavirus closures, cancellations or illness:
If you are self-employed and single aged 25+, you will be eligible for £317.82 a month (around £80 per week) as soon as the government remove the ‘minimum income floor’ they apply to the self-employed (explained below). Payment is backdated to the day you apply. Payments increase for couples and people with dependents. They decrease for people under 25. They are affected if you’re a couple and one of you is working. Info about how much you receive here: https://www.moneyadviceservice.org.uk/en/articles/how-much-is-universal-credit
- You apply online, here: https://www.gov.uk/apply-universal-credit
The application process includes verifying your identity. Have your passport and driver’s license to hand. It takes around 20 minutes and requires email verification. In the online application they ask what you have earned each month in the past year. If your income is sporadic or unknown, divide your net income (after expenses) from your 18-19 self employment tax return into 12 and enter this amount for each month on the form. There are some questions about what work you are looking for, and I just filled in what I did e.g. ‘installation art commissions’ and ‘composition’. In places the form doesn’t quite work for this situation (e.g. self-employed people who aren’t looking for work but just can’t work at present). Just wing it and explain where possible that you are applying because of the Coronavirus situation. It won’t affect your application as staff are well aware of the situation we are in. I recommend signing up for updates via text message, so you can keep on top of it. Once completed, you will have an online Universal Credit account. There is a section in there called ‘Journal Entry’, which becomes useful later on…
- You then must phone them to book an initial appointment. They are ridiculously busy at the moment so expect a wait. However, you might be able to book your initial appointment via the ‘Journal Entry’ section of your online account.
- Once you get through, they will offer you an initial appointment. At this appointment, they will explain that:
– Currently, there is a ‘minimum income floor’ applied to all self-employed people. What this means is that they assume you are working for minimum wage, 35 hours a week, totalling £1,144 a month. Even if you aren’t, they apply this to your account as ‘income’ which means you are not eligible for universal credit as you earn too much. I don’t understand why they do this, but…
– The government are set to announce that the minimum income floor is removed, meaning a single person aged over 25 (e.g. does not live with a partner or have children) will be eligible to basic universal credit of £317.82 a month. Info about different living circumstances here: https://www.moneyadviceservice.org.uk/en/articles/how-much-is-universal-credit
– However, if you are currently sick with suspected Coronavirus and are self-employed, the income floor is immediately removed, and you are eligible straight away.
– If you have savings of more than £16,000 you are not eligible for Universal Credit. If you have savings of between £6,000-£16,000 it goes to a decision maker who might decide you are eligible for a lower amount. If you have money in the bank for project budgets that is not for yourself but is set aside to pay for materials and the wages of other freelancers that work with you, then you need to purchase materials and pay wages now so this money is not in your account. However, they do not require proof of income or check your bank accounts. It’s up to you how you deal with this. I simply can’t purchase equipment for future commissions now, but I might pay my team early.
– You can inform Council Tax, and other rates (Water/Gas/Electric) that you have applied for Universal Credit and they will reduce your bill or put a cap on it. I’m not sure for how long.
– You can’t get help to make mortgage payments. Most banks are being very accommodating and can pause your mortgage payments.
– In your Universal Credit account ‘Journal’ section, you do not need to frequently add Journal Entries to prove you are looking for work, as you are currently unemployed because of Coronavirus. I was advised to not worry about this, and to only add ‘Journal Entries’ if my circumstances change e.g. I become ill, or I am earning in some way. You can also message them in the Journal if you have other queries.
– Universal Credit is backdated to the day you apply.
- Finally, at my initial appointment today, they booked me in for a telephone ‘self-employment’ appointment in 2 weeks’ time. They said they believe the income floor will be removed by then, and to not worry.
- If you are in dire straights, you can apply for an advance payment of £317.82, which is interest free and paid back over 12 months through deductions to your usual Universal Credit payments. You apply for this in the ‘Home’ section of your online Universal Credit account.