Would you like to know a secret?

Did you know that if you’re self-employed and work in the United Kingdom, you could be eligible to claim Universal Credit?

I’ve been claiming Universal Credit (UC) for just under a year, and it’s been an absolute godsend, especially in the early days of starting my business. 

With so much uncertainty around my income, monthly UC payments helped alleviate sleepless nights worrying about my finances.

I owe it to my brother for letting me know about UC in the first place. We were both made redundant during the pandemic, and he suggested that I might be able to make a claim whilst setting up my business. 

As I started to look into it, I was sure there would be a catch. It almost seemed too good to be true. 

There’s a lot of stigma attached to claiming benefits in this country, and I’ve kept quiet about claiming UC until now.

But I’ve decided it’s time to open up about it, as I think this will be a massive benefit to other freelancers too.

What is Universal Credit?

UC is a monthly benefit paid directly into your bank account by the Government to help you with the cost of living. 

The amount of UC you can claim each month varies. It depends on your minimum income floor (your assumed level of earnings based on minimum wage and expected number of working hours) and how much you have earnt that month. 

Who can claim

People often think that you can only claim UC when you’re out of work or unable to work. However, this isn’t the case. 

Did you know that you can also claim UC if you are on a low income?

Whilst some months as a freelancer can see the money rolling in, other months it can leave your bank account drier than the desert.

Although I was lucky enough to be earning money from the get-go, there were months early on where I barely made enough to cover my rent, let alone pay my bills.

I had a small amount of redundancy pay to fall back on, but this would barely get me through three months if I didn’t instantly make good money.

There were times when I considered getting a part-time job until my business kicked off, but I knew I wanted to make a career out of my business, and I just needed some help to keep me going whilst I built up my client base.  

If you decide to make a claim, you will want to look at the ‘if’s, but’s and maybe’s’ first. There are some restrictions to be aware of before you apply, i.e. if you live with a partner – their earnings will be taken into consideration, and if you have loads of savings, this could also restrict whether you can claim or not. But this is all explained in more detail on the Gov.uk website. 

How to claim

Claiming is really simple.

All you need to do is register via the link below:

https://www.universal-credit.service.gov.uk/start

You can expect to have a phone/face to face appointment arranged to speak to your local job centre, who will explain the next steps. 

I applied whilst the world was still locked down, so most of my early appointments were telephone based, although this may now have changed.

When submitting your application, make sure it’s clear that your self-employed work is your main income stream. 

During the first month or so, I had regular check-ins with a work coach who kept trying to get me to take courses and apply for other jobs. However, when they finally realised I was genuinely earning money through being self-employed, the regular meetings and the need to track my job hunting progress ceased. It is, however, worth asking them about courses, as I attended a couple whilst I was setting up my business that were quite useful. 

I now have a meeting at the job centre once a quarter which lasts around 30 minutes. This allows them to check I’m not abusing the system. They check that my income and expenses match the information I have reported to them every month by checking bank statements, invoice/expenditure spreadsheets and my receipts. 

It usually takes about five weeks to receive your first payment, and as long as you report your income and expenditure on time, you can expect to receive payments monthly after that.

There’s no timescale as to how long you can claim UC. The job centre will help you reach a point where you’re earning enough money to support yourself, by making recommendations on how to market your business better for example. As your income increases, your UC payments decrease, and eventually, the payments will stop once you’re earning above a specific threshold. 

There is also nothing to stop you from claiming again in the future if your circumstances change, which is helpful as a freelancer, as you never quite know how long you’ll have clients for! 

Dealing with the stigma attached to claiming benefits

I don’t know why I feel weird about confessing to claiming benefits. 

I’ve always done things by the book financially. 

I’ve always paid my taxes and national insurance. 

I’ve never lived beyond my means. 

Yet, there’s still that sense of embarrassment about admitting to needing that extra bit of financial help, especially with the ever increasing cost of living. 

The last time I met with my work coach, I tried to assure her that I planned to be earning enough money by Easter to stop claiming. She said there was no rush, as they are there to support the self-employed for as long as they need the help. They genuinely seem pleased to meet people like you and I, who work hard to earn an income through their own businesses.

I hope you’ve found this post helpful. 

I’d love to hear your feedback, so why not leave me a comment below or drop me a DM on my social media channels?

Further Information

To find out more about Universal Credits and how to claim, click here

To apply for Universal Credit, click here