Universal Credit for self employed: How to claim Universal Credit when self employed

There are five million self employed workers in the UK. The Chancellor Rishi Sunak announced last month the goverrnment would support self-employed workers by paying 80% of their average profits, but this won’t be available until June. Self-employed workers are often more vulnerable than employees as they don’t have a larger company backing their job or the same rights and benefits as someone in full-time employment.

To be eligible for Universal Credit you need to be ‘gainfully self employed’ by meeting several criteria:

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

If you are regarded as being gainfully self-employed whilst claiming Universal Credit you will not be expected to look, or be available, for other work.

This is so self employed people can continue to work on their business despite coronavirus.

However, it will be assumed that you are earning the same amount as someone like you who is in paid work.


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This will usually be what someone of your age would earn if they worked at the National Minimum Wage for the number of hours that you are expected to work or look for. This is also known as the Minimum Income Floor.

If you earn less than the Minimum Income Floor, Universal Credit will not make up the difference. Additional work will be needed to top up any remaining income.

If you earn more than the Minimum Income Floor, your Universal Credit payment will be based on your actual earnings.

The Minimum Income Floor will not be applied for up to 12 months after you start self-employment.


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This initial 12 months is known as a start up period, and during it you won’t need to look or make yourself available for other work.

However you must show the DWP that you are taking steps to build your business and increase your earnings when you talk to your work coach.

What if I have COVID-19?

If you are self-employed and claiming Universal Credit, and are required to stay at home or are ill as a result of coronavirus, the Minimum Income Floor will not be applied for the period of time you are effected.

You must report any earnings from self-employment to the Department for Work and Pensions monthly.

There are currently no provisions in place for self-employed people without coronavirus who have found themselves unable to work due to lack of need.

What is Minimum Income Floor?

Minimum Income Floor is calculated by comparing how much you are currently earning with how much you would usually be earning or be expected to earn.
If you have been self employed for less than a year, the minimum income floor does not apply to you.

How much you get also depends on whether you have children or are a carer for another person.

The government has been criticised for failing to provide more support for self employed workers.

On Friday, the chancellor Rishi Sunak outlined plans to pay employees 80% of their salaries, capped at £2,500 per month, in an attempt to avoid mass unemployment. This does not apply to self employed people.

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