Income from self-employment

Different rules apply to those who are self-employed. The Universal Credit system normally makes an assumption of your minimum monthly income based on the National Minimum Wage (NMW). Depending on any caring responsibilities you may have, it assumes you earn at least the equivalent of up to 35 hours a week at the NMW rate for your age group. If you earn more than this, the calculation is based on your actual income. This assumed income, known as the Minimum Income Floor, means self-employed earners face reductions in the level of support they receive under Universal Credit even if they do not actually earn as much as the government assumes.

However, in response to the coronavirus outbreak, the government has temporarily abolished Minimum Income Floor, so that any reduction in entitlements is worked out on the basis of what individuals actually earned, rather than an assumption of what they should earn. This will last for the duration of the outbreak. (This is the same situation as that which normally applies during the first 12 months of starting a business. During this period your actual monthly earnings are used to work out your entitlement and the Minimum Income Floor does not apply. )