On 26th March the government announced details of the Self-Employed Income Support Scheme. The aim of the scheme is to support the self-employed during the Coronavirus pandemic.
The scheme will provide those who are eligible with a taxable grant, worth 80% of their average monthly profits over the last three years, up to £2,500 a month. The grant will cover March, April and May and it is expected that it will be paid as a lump sum in early June.
More details on the scheme and who is eligible here.
How does Universal Credit fit in?
Many people will not be able to manage financially until June.
If they are already getting Tax Credits and/or Housing Benefit they should seek help from a benefit adviser to check if UC could be a better option for them now.
If they are not currently getting Tax Credits or HB, they could try for UC.
The Minimum Income Floor has been suspended during the Coronavirus outbreak, therefore their UC award will be based on their actual income and allowable expenses.
When they receive the SEISS grant in June, they will need to report the payment and it will be treated as earnings for Universal Credit for the Monthly Assessment Period during which it is received. There will be no need for the DWP to reassess entitlement for March, April and May and there will be no overpayment of UC as a result.
If the claimant has been reporting a loss every month up to then, this can be offset against the grant and only the difference will be treated as earnings. More on this here.
For many, the lump sum SEISS grant payment will mean that the claimant's UC award reduces to nil for that month. It will be important for claimants to be aware that they will actively need to reclaim in order to be awarded UC for the following assessment period.
Some claimants will be affected by the 'surplus earnings' rule – where some of the surplus earnings, due to the SEISS grant, are expected to be used in the following month/s. More on this here.