Can I get benefits if I am self-employed? Which ones? If you are self-employed, you may be eligible for benefits. Mainly, you may be able to get Universal Credit. Indeed, this Your Benefits article will walk you through all you need to know about self-employed benefits.
Can I earn benefits if I am self-employed?
If you are self-employed, you may get benefits. More specifically, you may claim Universal Credit among other things. Indeed, this is because Universal Credit is replacing a number of means-tested benefits. Whether you can claim Universal Credit depends on your circumstances and if you are expected to work.
Can I still earn the Self-Employment Income Support Scheme?
The Self-Employment Income Support Scheme (SEISS) was one of the benefits self-employed people could get. Indeed, you may have gotten it if you were not an employee. Furthermore, there is a list of qualifications that need to apply to you.
Eligibility is found using 3 different stages for those self-employed. Your trading record and status is looked at with stage 1. Then, your tax returns and trading profits are observed in stage 2. Finally, your intention to trade is inquired in stage 3.
How much you may receive depends on your turnover and average profit. For example, your turnover may be 30% or over. In this case, you would receive 80% of 3 months’ worth of trading profits. However, your turnover might be under 30%. In this case, you may only receive 30% of 3 months’ worth of trading profits:
| SEISS grant amount based on your business' turnover in 2022 | ||
|---|---|---|
| The percentage that your turnover decreased by | What you will receive | The maximum amount of grant you can get |
| Below 30% | 30% of your average trading profits for 3 months | £2,850 |
| 30% or above | 80% of your average trading profits for 3 months | £7,500 |
Can I get Universal Credit if I am self-employed?
In order to receive Universal Credit, you will need to report some things about your income. Indeed, this includes the following:
- Payments going in and out of your business;
- Your own personal self-employment earnings (this information must be reported. Indeed, this is even if you had no earnings for the month);
- Payments that were made for a pension.
You may report your income online. More specifically, on your Universal Credit account on the Gov.UK website. Indeed, this can be done in the section called ‘report your income and expenses’.
One of the things that you need to report for your business is both the money going in and out. More specifically, the following:
- How much money your business was able to get in total;
- Expenses paid by your business: this can include things such as travel, equipment, tool, stock and office costs;
- The total amount paid by your business in National Insurance and tax.
Do I need to indicate any more information about my employment?
You may earn Universal Credit if you work as a self-employed worker. However, you will need to prove that your self-employment is indeed your main occupation, for a number of hours. In order to do this, you will indicate the following in your claim:
- You are able to work on a regular basis with self-employment;
- Self-employment is your main occupation, or the main way through which you receive income;
- You already make or expect to make a profit;
- You can provide proof of the work that you do (this may include things like receipts, accounts and invoice).
Furthermore, you will be assigned a work coach with Universal Credit. You will need to give them some evidence for your self-employment. More specifically, the following:
- Your Unique Taxpayer Reference (UTR) (this is if you registered for a Self-Assessment already);
- Your suppliers (this includes not only a list of who they are, but receipts and invoices of your business with them);
- Tax returns, accounts and business plan;
- Marketing materials for your business.
If you provide all this information, you will be considered ‘gainfully self-employed‘. Indeed, you will not have to apply for a new job in order to continue to get Universal Credit. However, not that failing to provide such information will mean that you need to apply for jobs to get the benefit.
How much is Universal Credit if I am self-employed?
Universal Credit is made up of two different parts: the standard allowance, and extra payments. Indeed, the standard allowance is the basic part of the benefit. Furthermore, your circumstances will determine if you can receive extra payments on top of it.
More specifically, you may receive the following with the standard allowance part of Universal Credit:
| Universal Credit standard allowance rates in 2022 | |
|---|---|
| Your personal circumstance | Standard allowance rate (per month) |
| You have a partner, and at least one of you is 25 years or older | £509.91 (for the couple) |
| You have a partner, and you are both younger than 25 years old | £403.93 (for the couple) |
| You are younger than 25 years old and single | £257.33 |
| You are 25 years or older and single | £324.84 |
Note that your earnings are one of the biggest factors that will affect your Universal Credit. There isn’t a minimum income floor, but there is a maximum amount of income you can get. Furthermore, if you do not have some extraordinary circumstances, you may not receive extra payments. However, you may if you have children, for example.
You may claim Universal Credit payments online. Indeed, you will need to create an account on the Gov.UK website, if you do not already have one. Then, that account is what you will use to submit your claim. However, if you really wish to do so, you may apply by phone.
How much Universal Credit can I get if I have children?
You may be self-employed and have children. If this is the case, you could receive extra payments of Universal Credit. However, the amount you are entitled to depends on a couple of things. Mainly, on their circumstance, how many you have, their age and their date of birth. Indeed, you may get the following:
- For your first or older child: £282.50 monthly if the child is born prior to 6 April 2017, or £237.08 monthly if the child is born on or after 6 April 2017;
- Second child, as well as additional qualifying children: £282.50 monthly (this amount is for each child);
- Your disabled child: £237.08 monthly;
- Your severely disabled child: £402.41 monthly;
- To cover childcare costs (up to 85% of costs can be covered): the maximum you may be eligible to be covered is £646.35 if you have one child, and £1,108.04 if you have 2 or more children.
These amounts are added onto the basic standard allowance amount of Universal Credit. For example, you may be self-employed, in a couple, older than 25 years old, and with a child born before 6 April 2017. In this case, you may earn £792.41 monthly with this benefit.
Self-employed benefits
There are additional benefits you may be able to get if self-employed. Indeed, it is not limited to only Universal Credit. Indeed, you may be eligible to receive Jobseeker’s Allowance. With this, you may be able to receiving both mentoring and an allowance.
Indeed, to receive this benefit, you must first be over 18 years old. Then, you or your partner must earn one of the following:
- Employment and Support Allowance (ESA);
- Jobseeker’s Allowance (JSA);
- Income Support: this is if you are disabled, sick or a single parent.
If you are eligible, you will then create a business plan with your mentor. Then, it may be approved. In this case, you may be able to receive a maximum of £1,274 in the span of 26 weeks. In order to apply, contact your nearest Jobcentre Plus.
You could be eligible for more tax credits. This, for example, depends on the start up period of your self-employment or employment. You can contact Citizens Advice for more information.
