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UNIVERSAL CREDIT AND BEING SELF EMPLOYED - HELP HELP HELP PLEASE AM DESPERATE

SarahN

Hi everybody,

Am a single mum with 2 young kids, 1 is 4 and the other is 7 months old. I lost my full time job after working 12 years for the same company, I then went on benefits currently claiming HB, child tax credit and income support. Before I went on HB the council said I should use all my redundancy money to pay the rent and only then will they be able to actually assist me. Once I started getting the benefit, I was really struggling with the rent as it was private and I had that house when I was working. I eventually lost the house because I was struggling to keep up with the rent and also because the landlord needed to have some work done. Also I set up a small business after I lost my job but its not doing well.

To cut it short am currently in a temporary acc. The job center rang me 2 days ago to let me know that the area I have been move to in on universal credit and that I should switch to it. She said although I might go back to my Borough where universal credit is not in place, it's a good idea that I switch to it now. She was really trying to convince me at that and said that, although I still do not get a salary from my business, universal credit will help pay the nursery for mu youngest child while I run the business. I told her that I will think about it and look for advise. She said she'll send me some notes to read (haven't received them yet).

My questions are:

- although I have been sent in this borough on a temporary basis, do I have the obligation to switch?
- will this universal credit affect the benefits I currently received?
- Am not getting a salary from the business yet and honestly thinking of closing it down by the end of the year if things don't move. How should I go about this? I have been trading for about a year and half now and am not even able to repay the loan I took to start the business.

- can I delay switching to universal credit until I get my permanent house?

-Do I have the obligation to accept the switch although am only in the area on a temporary basis? The area where I come from does not currently have UC.

Please please please, I need some advise, am really desperate right now and can't even sleep. If anyone has been in this situation please help. I work about 5-10 hours a week, sometimes less when I have no orders to ship. At times i can go 2-3 weeks without a single order, just to give you an idea of the situation.

Also I have never claimed working tax credit since I started the business, was I suppose to? Just asking this one because a friend was telling me that, although I do not take salary from the business I still could have claimed working tax credit, is that correct?

I';; stop for now hoping to receive a lot of response and advise about my situation, Am really desperate for answers right now.

Thank in advance.

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Comments

Chloe_Alumni

Hi @SarahN and the warmest welcome to the community. I am so sorry to hear how much you are struggling at the moment, it must be an incredibly stressful time for the whole family.
I am not trained in benefit advice but I hope @BenefitsTrainingCo will be able to provide some assistance. Also, other members on the community may be able to help in some way.
Are you currently on any disability related benefits or carers allowance, is this an option for yourself?
In the meantime, you could try ringing our helpline on: 0808 800 3333 as they may be able to offer some personal advice.
If you need anything else then please do not hesitate to be in touch, have a lovely day!

BenefitsTrainingCo

SarahN,

My advice would be NOT to claim Universal Credit. You are under no obligation to do so, and I think it could make things more complicated for you. You are in temporary accommodation, so you can carry on getting Housing Benefit (I assume you moved into the temporary accommodation since 11th April - if so, it's fine to get HB for it).

At the moment I'd say that you probably can't claim Working Tax Credit as you are not working enough hours. However, it all depends on how many hours you are working in total - if you are working 16 or more (including hours you spend on marketing) then you could claim Working Tax Credit, and that can help you with childcare costs too. However, you would need to be able to show that in total, you're working 16 hours a week.

If you did claim UC, as you have a child under a year old, you wouldn't currently have to look for more work. But once your youngest child is one, you'd have to attend work-focused interviews at the Jobcentre; when they were two you'd have to do some work preparation (courses, working on your CV etc), and once they were 3, if you were still self-employed you'd be assumed to have a much higher income from your self-employment than you actually do. This isn't something to worry about now, though - your youngest child is too young for UC to make you look for work or to assume you have any income you don't have.

Overall though, my advice would be, don't claim UC because you don't have to. The only current advantage would be that UC could help with your childcare costs when you are working (regardless of your hours of work). Otherwise, over time you could end up worse off (eg if one day you do end up working more hours, UC becomes less generous than the older benefits system, apart from the way it helps with childcare costs). As to your questions:

although I have been sent in this borough on a temporary basis, do I have the obligation to switch? No - because you are allowed to claim Housing Benefit for temporary accommodation, you are not making a new claim for any of the benefits abolished by UC. So you don't have to switch, and can wait and see what happens with getting permanent accommodation

- will this universal credit affect the benefits I currently received? Yes - if you claimed it, your Child Tax Credit and Income Support would stop. You'd still get HB (if I'm right and you are getting this now, for your temporary accommodation). It usually takes five weeks from your date of claim for your first payment of UC. You can get an advance payment of UC at the beginning of your claim, but you have to pay it back.

- Am not getting a salary from the business yet and honestly thinking of closing it down by the end of the year if things don't move. How should I go about this? I have been trading for about a year and half now and am not even able to repay the loan I took to start the business.

You can stop trading if you want to. If you are registered as self-employed with HMRC you would need to tell them, and if you have set up a limited company you would need to close it down via Companies House (it seems unlikely that you would have done this, though).

- can I delay switching to universal credit until I get my permanent house?
You can delay switching to UC, at the moment, until you have to claim a benefit which has been abolished by UC and you are in an area where UC is available. At the moment you don't have to do this because you are already on tax credits, so, for example, if you did get a job working 16 hours or more, you could just add Working Tax Credit to your tax credit claim. The only reason you would have to claim UC is if you needed to make a NEW claim for a benefit which doesn't exist any more and has been replaced by UC. At the moment, I can't see you having a change of circumstances that would cause this. If you are still getting Housing Benefit from your old local authority then that can continue when you move back to that area (bear in mind that everywhere in Great Britain will have UC by the end of this year, so your old area will change eventually, but that doesn't mean you have to claim UC - you only have to do that if you are making a NEW claim for a benefit & that benefit can't be claimed because of UC).

-Do I have the obligation to accept the switch although am only in the area on a temporary basis? The area where I come from does not currently have UC. As above - no, you don't, because you are not in a position where you have to make a new claim for a benefit that has been abolished by UC. The fact that your old area doesn't have UC isn't really relevant at the moment, but it may be relevant when you move back - it's possible that by then, it WILL have UC. But even then, you'd only have to claim it if you were making a NEW claim for one of the benefits abolished by UC (tax credits, Income Support, income-based JSA, income-related ESA or HB). At the moment I can't seen any immediate reason why you'd need to make a new claim, assuming that your HB claim is still with your old local authority?

Will

SarahN

Thank you so much , I appreciate all your suggestions. I'll keep you updated soon.

Sarah

SarahN

BenefitsTrainingCo said:

SarahN,

My advice would be NOT to claim Universal Credit. You are under no obligation to do so, and I think it could make things more complicated for you. You are in temporary accommodation, so you can carry on getting Housing Benefit (I assume you moved into the temporary accommodation since 11th April - if so, it's fine to get HB for it).

At the moment I'd say that you probably can't claim Working Tax Credit as you are not working enough hours. However, it all depends on how many hours you are working in total - if you are working 16 or more (including hours you spend on marketing) then you could claim Working Tax Credit, and that can help you with childcare costs too. However, you would need to be able to show that in total, you're working 16 hours a week.

If you did claim UC, as you have a child under a year old, you wouldn't currently have to look for more work. But once your youngest child is one, you'd have to attend work-focused interviews at the Jobcentre; when they were two you'd have to do some work preparation (courses, working on your CV etc), and once they were 3, if you were still self-employed you'd be assumed to have a much higher income from your self-employment than you actually do. This isn't something to worry about now, though - your youngest child is too young for UC to make you look for work or to assume you have any income you don't have.

Overall though, my advice would be, don't claim UC because you don't have to. The only current advantage would be that UC could help with your childcare costs when you are working (regardless of your hours of work). Otherwise, over time you could end up worse off (eg if one day you do end up working more hours, UC becomes less generous than the older benefits system, apart from the way it helps with childcare costs). As to your questions:

although I have been sent in this borough on a temporary basis, do I have the obligation to switch? No - because you are allowed to claim Housing Benefit for temporary accommodation, you are not making a new claim for any of the benefits abolished by UC. So you don't have to switch, and can wait and see what happens with getting permanent accommodation

- will this universal credit affect the benefits I currently received? Yes - if you claimed it, your Child Tax Credit and Income Support would stop. You'd still get HB (if I'm right and you are getting this now, for your temporary accommodation). It usually takes five weeks from your date of claim for your first payment of UC. You can get an advance payment of UC at the beginning of your claim, but you have to pay it back.

- Am not getting a salary from the business yet and honestly thinking of closing it down by the end of the year if things don't move. How should I go about this? I have been trading for about a year and half now and am not even able to repay the loan I took to start the business.

You can stop trading if you want to. If you are registered as self-employed with HMRC you would need to tell them, and if you have set up a limited company you would need to close it down via Companies House (it seems unlikely that you would have done this, though).

- can I delay switching to universal credit until I get my permanent house?
You can delay switching to UC, at the moment, until you have to claim a benefit which has been abolished by UC and you are in an area where UC is available. At the moment you don't have to do this because you are already on tax credits, so, for example, if you did get a job working 16 hours or more, you could just add Working Tax Credit to your tax credit claim. The only reason you would have to claim UC is if you needed to make a NEW claim for a benefit which doesn't exist any more and has been replaced by UC. At the moment, I can't see you having a change of circumstances that would cause this. If you are still getting Housing Benefit from your old local authority then that can continue when you move back to that area (bear in mind that everywhere in Great Britain will have UC by the end of this year, so your old area will change eventually, but that doesn't mean you have to claim UC - you only have to do that if you are making a NEW claim for a benefit & that benefit can't be claimed because of UC).

-Do I have the obligation to accept the switch although am only in the area on a temporary basis? The area where I come from does not currently have UC. As above - no, you don't, because you are not in a position where you have to make a new claim for a benefit that has been abolished by UC. The fact that your old area doesn't have UC isn't really relevant at the moment, but it may be relevant when you move back - it's possible that by then, it WILL have UC. But even then, you'd only have to claim it if you were making a NEW claim for one of the benefits abolished by UC (tax credits, Income Support, income-based JSA, income-related ESA or HB). At the moment I can't seen any immediate reason why you'd need to make a new claim, assuming that your HB claim is still with your old local authority?

Will

I moved into the temporary accommodation in May and still receive Housing Benefit. I currently work 5-10 hours/weekly as the business is quite slow at the moment and cannot afford to draw a salary from it.

Thank you for all the info provided. Now that everything is clear I will stand my ground with the lady from the job center as she keeps calling asking me to apply for UC.

Thank you very much for these needed informations.

Sarah

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