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Gainful self employment test

On Universal Credit, whether you are gainfully self employed or not, decides what other commitments may be placed on you and whether you will be affected by the Minimum Income Floor.

You cannot be considered as gainfully self employed if you are:

  • Lead parent to a child under 3 years old

  • Have been awarded Carer’s element

  • Have Limited Capability to Work (with or without Related Activities)

  • Lead Foster Carer

  • Pregnant women during the period spanning 11 weeks before and 15 weeks after the expected week of childbirth

  • Over State Pension age

If you do not fall into an above exception, you will be asked to take part in a meeting with a work coach at the Jobcentre  to establish if you are considered to be gainfully self employed. This is usually completed as part of your self employed gateway interview. At the gateway interview you will be provided with information regarding how being self employed on Universal Credit works, what you need to report and signposting you to any services that may be helpful in your self employment. 

 

As part of the gainful self employed test you will be asked questions about how you operate your self employment and future plans.


You will considered to be in gainful self-employment where all of the following apply:

  • You are carrying on a trade, profession or vocation as your main employment

  • Your earnings from that trade, profession or vocation are self-employed earnings

  • The trade, profession or vocation is organised, developed, regular and carried out in expectation of profit.

If you are found to be gainfully self employed:

  • You will be entitled to a 12 month start up period.

  • Out with your start up period, you will be subject to the Minimum Income Floor.

  • You will not be asked to seek alternative employment.

During the start up period:

  • UC will use actual take home pay to work out your UC payments. This period is intended to give you support to increase your earnings to the expected level.

  • You will not be asked to seek alternative employment.

  • During your 12 month start up period you will be assigned tasks to complete that could help grow your earnings.

  • You will be expected to take part in 3 monthly reviews with a work coach. If you fail to take part in mandatory appointments or complete the tasks you have been assigned, your start up period can be ended and the Minimum Income Floor will be applied from that point.

If you are found not to be gainfully self employed:
People assume that if they take part in a Gainful Self-Employment Test and are found to not be
gainfully SE and they have failed. It comes across as very negative, but it can have many advantages.

  • The Minimum Income Floor cannot be applied to you. This means that UC will use your actual earnings as take home pay and your payment is far more reflective of your earnings.

  • You will still be expected to self report your self employed earnings at the end of each assessment period.

  • You may be asked to take part in commitments tailored to your circumstances including work search, if applicable.