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Social Security Benefits: Self-employed

Question for Department for Work and Pensions

UIN 8307, tabled on 21 July 2015

To ask the Secretary of State for Work and Pensions, whether the (a) minimum wage and (b) living wage are considered as an income for the purposes of a self-employed claimant declaring income below that level for (i) universal credit, (ii) working tax credit and (iii) housing benefit.

Answered on

8 September 2015

Working Tax Credit is a matter for HMRC, but earnings are taken into account as income for all income-related benefits, subject to each benefit’s specific rules. For Universal Credit, which can include a Housing Costs element, a gainfully self-employed claimant may be subject to a Minimum Income Floor (MIF). The MIF is an assumed level of earnings designed to encourage claimants to develop their business, and calculated by multiplying the National Minimum Wage by the number of hours the claimant is expected to work. Where the claimant is within one year of starting out in self-employment, and is taking active steps to increase their earnings, they may be eligible for a one year start-up period during which the MIF is not applied. The new National Living Wage is not a factor at this stage.