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MIF for a couple with a child under 1

Charles
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I just saw a client who is self-employed and has a child under the age of 1. His partner is the responsible carer, and has some employed earnings.
What is the couple threshold for the purposes of reg 62(3)(b) in this case? His partner has no prescribed individual threshold (that I can see), as she is not subject to any work-related requirements.

If the couple threshold is simply his individual threshold, it would dramatically improve the MIF’s effect on him, due to her earnings.

Daphne
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I read it as their combined threshold would be 35 x minimum wage (because partner has none) and the self-employed person’s individual threshold would be the same which is approximately £1000 per month.

So if S/E person’s earnings are, say, £400 then they will be treated as having earned income of £1,000 (individual threshold) less (£400 + whatever partner is earning less £1,000 (couple threshold)). So if partner earns above £600 then it will in effect reduce MIF by same amount.

Would it be better if they switched main carer so self-employed was main carer and then partner would be subject to conditionality (but no loss of money) until they reached £1,000 income between them.

Charles
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Daphne - 01 August 2019 03:05 PM

I read it as their combined threshold would be 35 x minimum wage (because partner has none) and the self-employed person’s individual threshold would be the same which is approximately £1000 per month.

So if S/E person’s earnings are, say, £400 then they will be treated as having earned income of £1,000 (individual threshold) less (£400 + whatever partner is earning less £1,000 (couple threshold)). So if partner earns above £600 then it will in effect reduce MIF by same amount.

I’m not sure I get what you’re saying?

If…

(the combined threshold) = (his individual threshold) = (£1,000)

...then every penny earned by the partner would reduce the effect of the MIF, no?

For example:
If he has S/E earnings of £400, she has earnings of NIL: total assumed earnings will be £1,000. That means notional income due to the MIF of £600.

If he has S/E earnings of £400, she has earnings of £200: total assumed earnings will still be £1,000. That means notional income due to the MIF of £400.

Is that what you mean?

My worry was that since the individual threshold is not defined for her, does that mean we can just use nil for it when calculating the couple threshold?

By the way, this same issue arises concerning the rules in reg 90 for those earning enough to not be subject to any conditionality.

Would it be better if they switched main carer so self-employed was main carer and then partner would be subject to conditionality (but no loss of money) until they reached £1,000 income between them.

I did suggest this to them, but she didn’t want to be subject to conditionality, especially as in reality it seems she most certainly is the main carer.

[ Edited: 2 Aug 2019 at 02:28 am by Charles ]
Stuart
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Charles - 01 August 2019 08:18 PM

My worry was that since the individual threshold is not defined for her, does that mean we can just use nil for it when calculating the couple threshold?

Although from 2016, and guidance, FOI response on the claimant commitment (attachment 6 in the list of documents attached on ‘Expected Hours’) includes -

for claimants in the NWRR group -No Work Related Requirements regime, there is no individual CET (this is considered as ‘0’ for the purposes of calculating a household CET

There’s also the couple example in para H4080 ADM Chapter H4 - covers couple MIFs and example 2 seems pretty close to apply to our scenario subject to putting in our income figures/MIF for both parties.

Charles
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Stuart - 02 August 2019 09:06 AM

Although from 2016, and guidance, FOI response on the claimant commitment (attachment 6 in the list of documents attached on ‘Expected Hours’) includes -

for claimants in the NWRR group -No Work Related Requirements regime, there is no individual CET (this is considered as ‘0’ for the purposes of calculating a household CET

Great, this is precisely what I wanted. Thank you!