Minimum Income Floor, Universal Credit Gainful Self-employment Tests and Start-up Periods

Mims Davies Excerpts

Thursday 8th July 2021 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

To support self-employed universal credit claimants through the pandemic, in March 2020 the Government introduced a temporary suspension of the minimum income floor (MIF), removed the requirement for gainful self-employment (GSE) tests and paused start-up periods.

We have always been clear that these would be temporary measures, keeping them under review in light of the latest economic and public health context; as such, we have extended the MIF suspension on two occasions since March 2020.

With the success of the vaccine rollout and rising demand as the economy reopens, it is right that we now begin to reinstate our normal processes. Therefore, we are reintroducing the MIF, GSE tests and start-up periods when existing regulations expire on 31 July.

To ensure everyone has time to prepare, claimants will be given a month’s notice that the MIF is being applied and no one will see a decrease in their universal credit award before September. As an additional safety net for those whose businesses continue to be heavily impacted by covid-19 restrictions, work coaches will be able to provide a suspension of the MIF for up to two months at a time on a case-by-case basis, for a maximum of three suspensions, adding up to six months in total.

The vast majority of claimants found to be gainfully self-employed will benefit from a one-year start-up period. Anyone who was in a start-up period when the easement came into effect in March 2020 will also not have the MIF applied for the balance remaining on their start-up period at that time.

Claimants who continue to be gainfully self-employed and are not entitled to a start-up period, will have the MIF applied. These claimants will be exempt from having to search for, or take up, any other employment, allowing them to concentrate on making a success of their business and maximising their returns up to and beyond the level of their MIF.

Claimants who are found not to be gainfully self-employed will receive support to move into employment through our comprehensive multi-billion-pound plan for jobs which is helping millions of people across the country. Our specialist work coaches will consider the circumstances of each claimant individually, so it will take time to return to our normal processes.

These new regulations, with the additional protection and support they contain, will be in place for one year, running up to and including 31 July 2022. To prevent there being any further delay to new claimants getting the support they need, all new claims during this period will have a gainful self-employment assessment at the start of their claim in the usual way.

[HCWS164]