Minimum income floor

I have a client who is being affected by this and I’m at a loss to know what to suggest to her.

She is a refugee and a lone parent.  Her youngest child is 15.  She started a small business a couple of years ago, and is now affected by the minimum income floor.

I’m not sure how her floor has been calculated - it looks to me as if it’s based on her working either 24 or 25 hours per week, but I don’t like to ask UC to clarify in case they realise that the child is now 15 and decide to increase her expected hours. 

I’m not sure what would happen if she found part time employment.  I think the business could be condensed into three or four days per week, which would leave her one or two days to do other work.  How would the minimum income floor be set in that scenario?  And how would any actual wages be treated?

Similarly she could look at a part time college course to improve her English.  If she did this could she argue that UC should reduce the number of hours available for her business and therefore reduce the minimum income floor figure? 

Unless she gives up the business altogether would be difficult for her to say it’s not her main activity (there’s a limit to how much she could reduce her hours as it’s a shop type business) and she’s definitely trying to develop it and make a profit.

25 hours would be £1,090.30. Is that what it is?

If she was to work part time, the MIF wouldn’t reduce, but her employed earnings would count towards the MIF each month.

For example, if the MIF is as above, and she has s/e profit of £500, then her award would be calculated based on income of £1,090.30 - an extra £590.30 above what she has actually earned.
If she also has £300 of employed earnings, then her award would still be calculated based on income of £1,090.30 - but that is now only an extra £290.30 above what she has actually earned.

Unfortunately, the MIF is based on a claimants ‘expected hours’, so cannot be reduced by such courses. A course doesn’t reduce your expected hours, it just reduces the amount of time you have to spend on other work search.

Hi Charles,

it was £1090, so 25 hours per week.

Thank you for such a clear explanation, it was very helpful.  The minimum income floor is brutal, she’s working so hard to grow her business and has a good business plan, so even though its costing her money to work at the moment she is not prepared t to give it up, or to look at a second job.

Hopefully in the long run it will pay off for her.

Doesn’t sound like it’s relevant here but just in case: the expected hours can be reduced on the basis of being a carer, or having health problems under Reg 88. When I’ve used it before, I’ve just argued that instead of 25, it should be 10 etc which in turn reduces the amount