Published On: Wed, Sep 2nd, 2020

Universal Credit changes September: Are YOU affected by new changes to Universal Credit? | Personal Finance | Finance

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Universal Credit is a Government payout designed to help some people with living costs. It is a payment made monthly in England, and twice a month for some people living in Scotland. People may be able to claim Universal Credit if they are on a low income, out of work or they are unable to work. Universal Credit is in the process of replacing a number of existing benefits, including Child Tax Credit, Housing Benefit, Income Support, income-based Jobseekers’ Allowance (JSA), income-related Employment and Support Allowance (ESA) and Working Tax Credit.

Changes to Universal Credit

This September, changes are being made to Universal Credit which could affect you if you are a claimant.

From September 2020, the minimum income floor will apply to all gainfully self-employed Universal Credit claimants after a 12-month grace period.

The Minimum Income Floor (MIF) usually applies to all new Universal Credit claimants, unless they are within the first 12 months start-up period of their business, or they have moved across as part of the managed migration exercise.

The MIF is an assumed level of earnings for claimants who are self employed.

READ MORE: Rishi Sunak launches Kickstart Scheme: When to expect job placements

This is based on what the Government would expect an employed person to receive in similar circumstances.

The MIF is calculated using the National Minimum Wage for your age group, multiplied by the number of hours you are expected to look for and be available for work.

It is also included a national deduction for tax and National Insurance.

If your self-employed earnings are below the MIF the Government has calculated for you, they will use the MIF to work out your Universal Credit award instead of actual earnings.

If you and your partner are claiming as a couple, you must:

  • Live at the same address
  • Be either married to each other, have a civil partnership, or living together as though you were married

Once you have established a Universal Credit claim, if you decide to become self-employed, the system will provide you with support to grow your business.

Thousands of people take the decision to start their own business in the UK every year.

However, it should be noted that your partner’s earnings may affect the level of MIF applied to your claim in certain circumstances.

Household income is used to calculate the amount of Universal Credit you receive, so your partner’s earnings are likely to affect your overall payment.



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