Self employed Universal credit Questions

[CuriousClaimant]

I currently get Universal Credit with the LCWRA element + they cover my full rent, . I’m not in education, I’m not a carer.

I’m planning to start a small business over the next few weeks - research and expenses have been done and it’s now just a matter of starting it all up and hoping for the best.
I’ve reported the self employment change to universal credit and had to report expenses and earnings. I haven’t made any earnings yet, and I’m now classed as “not gainfully self employed”. However they are also saying: “What this means for you
To keep getting Universal Credit, you will need to start looking for
and being available for other work.”

They have not explicitly said I’m losing my LCWRA but that’s what it sounds like? I have asked for clarification on my online journal. I didn’t expect to make much in the first few months - and my health is still unpredictable which means finding or keeping a traditional job would be very difficult but I’m not using it as an excuse.

I’m confused about how this all might affect my payments.
my questions are as follows:

• Would UC payments be reduced if I start self-employment? For example am I losing the LCWRA?
• Will I get more universal credit for being self employed?
• when I submit my earnings and expenses at the end of the self assessment period, how do they work out how much universal credit I’m entitled to? Can I have some examples?
• How does the Minimum Income Floor work, who does it apply to, and what does it even mean?
• Will I be better off self employed or worse off - will I get additional UC for being self employed?
• Would Housing Benefit still be paid in full if I’m self-employed?
• Are there other things people on UC should know when starting their own business?

really hoping someone can answer 🙂

The literal purpose of LCWRA is that you have limited capability for work and work related activity. There are some circumstances when some level of work may be permitted however there are restrictions. It may be viewed that your new plans go against your previous claim and eligibility for LCWRA, therefore you will need to discuss this with them. I'm not sure making the self employment change so quickly before full set up was the best decision. Answering all your specific questions is difficult even for me and I do this as a profession. Your ultimate UC award will depend entirely on your circumstances, your monthly earnings, what UC decide about your health status and many other factors. I note you say Housing Benefit? Unless you are in specified accommodation you would not be receiving HB now, but the Housing Element of UC. This as part of your overall UC will be reduced by your earnings according to your income. Also bear in mind the work allowance you currently would have under LCWRA (if youndo not also have children) may not be applied. You will need specific advice based on your circumstances going forward.

They should have called you in for an interview to answer all these questions for you.

I can’t answer all but they text you once a month to remind you to update your income and expenses, then you log onto your uc account to do that. Really quick and simple. They’ll take anything you’ve earned off your payment, minus any expenses and then send you your monthly calculation a few days later.

Surely you’ll just be treated like anyone on UC who is looking for work, in work or self employed. You can’t have it both ways.

The Minimum Income Floor is applied after a year so that you can build up a business but if it is unrealistic as an income, ie not hitting a Minimum income floor after that year you would be expected to find 'gainfull employment'. This is designed to stop people dabbling with a hobby job subsidised by the taxpayer indefinitely.
You are allowed to earn and keep some earnings above UC level and gradually phase out.of UC
Your LWRC may be able to continue during this process but once your income exceeds what UC deems adequate, your claim will be closed.
I don't know about housing element

You really should speak to your work.l coach and read all the 'commitments ' they send you on your account.

No, as they have lcwra, the minimum income floor wouldn't apply.

OP speak to them about a 'start up period' for self employment.

However the LCWRA may be re assessed, especially if OP is indicating fitness to work let alone carry out work related activity which preparing for this new venture indicates they are now capable of. Its important to bear in mind that it is the WRA part that gives the extra allowance. LCW only means no requirement to work but work related activity would be expected. All of this is going to depend on how UC view the circumstances going forward. The most important thing to remember is that whilst LCWRA won't automatically stop because you start working, you are obliged to inform them if your condition has improved (ie since you were assessed as LCWRA) and they will decide if reassessment is appropriate.

Nope . Op has LCWRA which for many just seems to continue without re-assessment for years even when people clearly are working again. They are so far behind with re-assessing people because they are just focusing on new claims for LCW. However if op's health conditions which have meant she cannot work have now improved, the onus on her is to report this to UC which may trigger a re-assessment. I believe the work someone starts to do should not contradict why they were awarded LCWRA.

what I don’t want to find out is that I’m worse off working especially when I already have a number of serious unpredictable (physical) health conditions and don’t have to work.

However I didn’t want to use my health as an excuse. I have focused on my mental health as well for a while and now feel that working would be better for my mental health and give me something to do and some self esteem and worth.
should I apply for a LCWRA re-assessment? Is being on LCWRA a benefit trap that’s hard to come off from - do you have a work allowance on LCWRA or do you have one without LCWRA?

I realise what I’m entitled to applies to individual circumstances. I meant to say I get the housing element.
How much can I earn before they reduce my universal credit? Will they give me more universal credit for working?
It’s all so confusing

If you make more money, you get more money. If you make over about £400 ish (don’t remember exact amount right now) it starts tapering off. If you have a random brilliant month it can fuck you over and affect other benefits. Try to consistently make a few hundred a month. Then when you know what you’re doing and have some savings behind you, you can gradually aim higher if you feel capable.

Edited to add: “Your work allowance is £411 a month if you get help with housing costs through Universal Credit. Your work allowance is £293 a month if you are getting help with housing costs from another source like Housing Benefit, or if you live with a family member and they pay your rent.”

To clarify, UC won’t give you more money for working, you’ll be giving yourself more money.

Your UC payments will only be reduced if you earn more than your work allowance (you do have a work allowance on LCWRA). You say you get your rent paid, so you can earn up to £411pm before your UC is affected. Then it will be reduced by 55p for every £1 over your work allowance.

Being in the LCRWA group means you have no minimum income floor. Unlike someone who is in the fit for work group, you can earn as little as you want and it wont affect anything and you wont be expected to be earning a certain amount in a certain time.

You wont get more UC for being self employed, but you will be better off anyway when you do make money from your business.

The job centre really should have sorted an interview for you to sort all of these queries when you reported a change of circumstances. It might be worth requesting one via your journal.

You will not have to have another Work Capability Assessment, and reporting as self employed will not trigger one. However, when the time comes to have a re-assessment, there might be issues if the reason you can not work contradicts the nature of your business eg, you can't work due to chronic back pain but are self employed as a builder.

One thing it might affect is council tax support, but that will depend on what you pay and what the rules are where you live.

Good luck OP. I know a few people in the LCWRA who have little self employed businesses... mainly craft based things such as jewellery etc.

If you are reassessed for LCWRA they will decide if you meet the criteria. Yes you do get a work allowance on LCWRA but it is not as straightforward as that. If your condition has improved overall to no longer meet the criteria for LCWRA you will no longer get a work allowance. The work allowance on LCWRA is seen as more to help couples where one cannot work due to long term health conditions and the other is the only one who can work hence the allowance to in part make up for this. Otherwise the work allowance is for parents with children of a certain age. LCWRA in the longer term is meant to compensate to a point for being too ill too work and was never intended to top up income if you become fit enough to work. With a work allowance you will be allowed to earn just over £400 before your UC is reduced by 55p per every £1 over approx £400 that you earn. As I've said before it is not necessarily about LCWRA reassessment they can decide to do that if they think its appropriate. You are obliged to report any improvement in your health if you believe you no longer meet the criteria for LCWRA. No one can specifically tell you what may happen. You have obligations under UC to keep them up to date with your circumstances. It really will at some stage be the case that if you earn more than your total UC (with or without WA) you will no longer be entitled to UC. It is designed that way for obvious reasons. The above poster also covered a lot more than I have. And I agree that the job centre should be working with you on this.

Where is this information from? The stuff about work allowance being for couples.
Thanks

1. Reporting self-employment does not trigger a LCWRA re-assessment.
2. Because you are getting LCWRA element you cannot be treated as gainfully self employed so will not get a start up period or have the minimum income floor applied.
3. You will get a Work Allowance of £411 per month - that assumes you get a housing element.
4. You will have to report your self employed income and expenses each month through your To Do’s. The amount taken as your income is total business income minus allowable business expenses. This income then has the work allowance applied and anything over the £411 is deducted from your overall monthly UC award at a rate of 55p in the pound.
5. You do not get any additional payments for starting or being self employed other than your earnings less your expenses.
6. At some unspecified point in the future you will be reassessed for LCWRA but until then you are not required to update your health although you are with PIP.

I have no idea what Catsknowbest is talking about- LCWRA has nothing to do with couples. A work allowance is given to parents and people with LCW / LCWRA elements on their claim and is per household rather than per individual.

Not specifically for couples- the point of what I was saying was that if one person in a couple on LCWRA cannot work due to long term health or disability the work allowance is then applied to all earnings on the joint claim, so if the partner works the WA is applied to their earnings. Apologies if not clear

You also don’t have to look for work.
I think the letter that is generated when you are found to be not gainfully self employed does say this but doesn’t actually apply to people with LCWRA - so it is misleading. You do NOT have to look for work or attend Jobcentre appointments. If I were you I would ask for a Jobcentre appointment so that you can get your questions clarified and also go through how to report your income and expenses so that they are correct and you don’t end up with over or underpayments because it was never explained to you properly.