Benefits Expert: Can you still claim while you are self-employed?

Q: I am thinking about becoming self-employed, but I am worried that I will not make much profit for the first year while I'm just new to the market.

Saturday, 10th June 2017, 6:00 am
Your questions answered by our benefits expert.

Is there anything that I could claim while I don’t have much income?

A: You could make an application for Universal Credit for financial support if you are in a full service area.

For the first year of your business the DWP would take into account your actual earnings as long as they are satisfied that you are gainfully employed.

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After the first year, the DWP can apply a ‘minimum income floor’; this means that they will assume that you are earning at least minimum wage for someone of your age even if you aren’t actually making that much money and your Universal Credit would be assessed accordingly.

You will need to provide details about your earnings every month unlike tax credits which is done annually.

If you are not in a full service Universal Credit area then you would need to apply for Working Tax Credit instead.

Tax Credits does not apply a minimum income floor and would simply need to know how much you estimate that you will earn followed by a confirmation at the end of the tax year.

You would need to work out how many hours you are spending in work, this can include hours that you spend with clients as well as time needed for doing accounts, cleaning of business premises, advertising and canvassing.

Generally, you need to spend 30 hours per week in work to claim Working Tax Credit, this is reduced to 16 hours for disabled people and single people with children, couples with children need to be doing 24 hours between them (still 16 if one of them is disabled or a carer).You may also qualify for Housing Benefit if you are in rented accommodation and Council Tax Reduction from your Local Authority.

Q: My Universal Credit claim has been sanctioned because I forgot about an appointment with my work coach.

The adviser told me that my claim was sanctioned, but I haven’t received my letter yet, so I don’t know how long for.

A: You should be sent a letter from the DWP which should explain why you’ve been sanctioned, how long for and how much your claim has been reduced by, it should also tell you the date of the decision.

Failing to attend an appointment should be considered a low level sanction and will mean that your standard allowance is stopped until the date that you attend a new appointment plus a set period of 7 days if it is your first sanction of this kind.

If this is your second low level sanction then it would be plus 14 days and if it was your third sanction then it would be plus 28 days.

You should phone Universal Credit on 0345 600 0723 if you feel that you had a good reason for missing the appointment.

You can also speak to them about applying for hardship payments.

To be eligible for a hardship payment you must have attended your new appointment and completed your work searches for the past 7 days; you also usually need a bank statement to confirm that you have no money available to you.

Hardship payments are usually 60% of your usual payments, but are a loan and will be recovered from your award once it is restarted.