Universal Credit - AET for lone parent with an 11 year old child

[mayfridayjune]

Hello all, I'm a lone parent, self employed and attended my self employed interview very recently and was told I'm gainfully self employed. My daughter is just about to start secondary school (11 turning 12 in a few months).

I was given an AET figure of £1189 or thereabouts, equating to 25 hours per week at minimum wage - I have to work towards increasing my earnings to this over the next 12 months (then it will increase again when my child turns 13).

Yet research I have done online suggests the AET should be £892 for single parents.

Can anyone confirm if they think I have been given the wrong AET? There's quite a difference between £892 and £1189! And other people I spoke to seem to have the £892 figure. So I am confused as to why mine is more?

I think there have been some recent changes to minimum hours, age of child and so on and wondering what experience others have and what their AET is if they have a child of the same age?

Many thanks.

It's because you're self employed. You therefore have a Minimum Income Floor to work towards, not an AET. And yep, the MIF is higher.

Welcome to being screwed over by Universal Credit.

Yep this

Thankyou @SelkieSeal are you self employed on UC as well? Do you have any tips for someone new to the system? It seems rather complex to get my head around and am keen to do it all properly.

And wow, how is that fair? There are so many things as self employed we don't get like pension contributions, sick pay and so on. It is even harder running your own business and being a single parent but we are also subject to higher thresholds? :(

thank you. Shocking isn't it! They really hate self employed people by the sound of things.

I am self employed, but I'm also a carer for my child who gets DLA so I don't have any work requirements or a MIF applied.

Even so, we are noticeably worse off since moving to UC. The earnings threshold is £404 per month before I start having UC award reduced whereas on Tax Credits it was £7.6k per year. So it's not only lower, but it's also applied monthly instead of averaging out. If your income is fluctuating (ie if it's seasonal, like many self employed trades) you're doubly screwed.

The MIF is set at the CET, not the AET.

AET - the level that moves you into Light Touch, effectively doesn't exist for Self-Employed people.

This is really confusing. So for arguments sake, if you earn 4k one month, then the next few months nothing, would the UC be adjusted back up in the later months? Or not at all?

It is so baffling.

If you earned £4k one month I think some of that would be treated as surplus earnings and carried forward to future months (thus reducing your UC award for any months it's counted towards), but I'd need to check that.

Once the MIF is applied, your award is worked out as though you'd earned that even if you haven't actually earned it.

So if your MIF is £1189 then your award will be based on earnings of £1189. Whether you actually have £1189 in profit that month is irrelevant. You might have earned nothing because of unexpected expenses, but you'll still only get the UC you'd get if you had earned £1189.

@SelkieSeal thank you so much. It's a bit clearer but I think I need to chat to a benefits advisor to clarify! It certainly does not sound as though it's set up to support people who are self employed with variable income.

Appreciate your help.

It is in no way set up to support self employed people with variable income, quite the opposite. That's the whole point.

You will find it extremely difficult once the MIF is applied unless you find a way to both increase and smooth your earnings so that they're roughly the same month to month, and hitting/exceeding the MIF.

@SelkieSeal thank you. I will do my best to increase and smooth them over - perhaps invoicing in partial amounts at different times would be better than doing a big invoice at the end of a project, for example.

I live in hope that labour might consider looking at changing the system.

Can you not work full time?

@Overtheatlantic why do you ask?

That's exactly the kind of thing you need to start doing. It takes some getting used to but once you've got your head round it it does get easier.

I wouldn't hold out much hope for Labour changing things much - they're making it clear they can't afford to, and there's no political will to make any benefits for those deemed capable of work more generous. What I hope they might be persuaded to change is to start allowing claimants to "mix and match" employed and self employed earnings, which at the moment isn't really possible. So for example if you earn £600 a month from self employment and £600 a month from employment, at the moment you'll still get hammered for not earning enough as either self employed or employed - even though you're earning over both the MIF and the AET!

@SelkieSeal thank you so much for the advice. I think it will definitely be possible for me to smooth over a bit with some careful management and I will try to get used to it from now onwards.

I wasn't aware of the self employed and employed thing, it's totally ridiculous and unfair. So you could feasibly earn more than the MIF / AET yet still be penalised? Crazy.

The system seems really regressive in lots of ways. Especially for those of us who do have variable income with some wild months and some quieter months.

Yep. If you're found to be "not gainfully self employed" then any self employed earnings don't count towards the AET - meaning even if you are actually taking home more than the AET, if it's not all from employed earnings you'll be endlessly hassled to work more hours. But the self employed earnings will still be taken into account when your award is calculated!

IMO that's very unfair and all earnings should be combined for the purposes of conditionality. Otherwise it's just not fair - either they count or they don't!