Martin Lewis: ‘Large lower in Common Credit score for a lot of self-employed approaching 13 November – contact your MP if hit’

How are my universal credit payments affected if the minimum income floor does apply to me?

Your universal credit payment is based on many factors, including where you live, whether you have children, whether you’re in a couple and more. And it’s also affected by how much you earn – or, how much you’re assumed to earn under the minimum income floor rule. So… 

  • If your actual income is LESS than your minimum income floor, it’s the minimum income floor that’s used to calculate your payments instead, meaning you’d get less universal credit than if your actual earnings were used.
  • If your actual income is MORE than your minimum income floor, your real earnings will be used to calculate your universal credit payments. 

If the Government brings the minimum income floor back next month, some self-employed people will see a drop in their universal credit. Here’s an example of what could happen (though as we said above, universal credit entitlements are based on lots of different factors, so see this as an illustration)…

A 40-year-old self-employed musician, who wasn’t eligible for help under the Self Employment Income Support Scheme (SEISS), started claiming universal credit in April after coronavirus restrictions disrupted his income. 

At the moment he is only able to earn around £200/mth due to reduced demand, and his universal credit payments are based on this amount. As he is a homeowner, lives alone and doesn’t have any children, at the moment he gets £283.89 per month in universal credit. 

But if the minimum income floor is brought back in, his universal credit payments would be calculated as if he were earning his minimum income floor amount. This could be around £1,200/mth for someone in his situation, though exact amounts will vary – even though his actual income is only a fraction of this. As a result, he would no longer be entitled to claim universal credit, leaving him almost £300 a month WORSE OFF. 

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