DWP confirms that self-employed universal credit claimants will begin to be impacted by reintroduction of the minimum income floor from mid-September 2021

Update to Social Security Advisory Committee advises that claimants who had already exhausted their 12-month start-up period prior to start of Covid-19 outbreak will be contacted and assessed from beginning of August and will face reductions from their next assessment period

The DWP has confirmed that self-employed universal credit claimants will begin to be impacted by the reintroduction of the minimum income floor from mid-September 2021.

In its July 2021 meeting - that scrutinised the Universal Credit (Coronavirus) (Restoration of the Minimum Income Floor) Regulations 2021 (SI.No.807/2021) which reintroduce the MIF from 1 August 2021, subject to modifications that allow for its suspension for up to a further six months on a discretionary basis - the Social Security Advisory Committee (SSAC) was advised by the DWP that -

'The very first people will be contacted during the first week in August, when they will be told that the Department is considering gainful self -employment and the MIF. They will be invited to have a conversation about that within the following fortnight. The ‘pre-Covid cohort’ will have a 30 minute conversation with a work coach, discuss their business, and determine gainful self-employment ...

The Department would also expect to see the next group - the partial start-up period group - within the first few months.'

NB - the ‘pre-Covid cohort’ are claimants who were already in the MIF regime, having exhausted their 12-month start-up period (when the MIF is not applied) at the point that the MIF regime was suspended in March 2020; the 'partial start-up period group' are claimants who had started but not exhausted their start-up period when the MIF was suspended.

In addition, the DWP advised the Committee that -

'The number of claimants who will see an impact on their universal credit award before the end of September is expected to be in the very low thousands, with the earliest someone will receive a reduced award being mid-September (which aligns with the ending of other government support).'

In relation to the 'partial start-up period group' and universal credit claimants who made new claims after the MIF suspension was introduced, the DWP said that they will be individually notified when the MIF is likely to apply to them when they are invited to the work coach interview -

'Mass communications were considered, but as this interview process will take months to work through the caseload, it was felt that issuing communications at the start of the process may not be effective, when many people will not be asked to come in for many months.'

Turning to address the Committee’s concerns about the period over which work coaches can suspend the MIF, and whether there is a contingency to extend it beyond the six months provided for under the regulations in cases where six months may not be sufficient - the DWP advised that -

'There is no contingency - the maximum is six months. However, this is all being kept under review so, if there were large numbers still requiring discretion, this would be discussed with the Secretary of State so a view could be reached on whether further adjustment to the regulations was appropriate.'

For more information, see SSAC’s July 2021 meeting minutes.