Coronavirus: information and updates

Self-employment and benefits

Warning Lost income because of coronavirus

The Government has a scheme for self-employed people who have lost income because of coronavirus.

Self-Employment Income Support Scheme (GOV.UK)

Self-employment support during coronavirus

Grants for starting a new business

You may be eligible for New Enterprise Allowance if you’re over 18 and either:

  • you or your partner get Universal Credit (UC), Jobseeker’s Allowance or Employment and Support Allowance (ESA)
  • you get Income Support and you’re a lone parent, sick or disabled

Starting your own business (GOV.UK)

Support with the extra costs of being disabled

You can claim Personal Independence Payment (PIP), if you’re self-employed, employed or unemployed. PIP is meant to meet some of the extra costs of being disabled. It is not means-tested so it does not matter how much money you have.

You will have an assessment to work out how much help you need with mobility and daily living activities. Depending on how much help you need, you may get a higher rate of PIP.

Working might suggest that you can do things that you could not when you were assessed for PIP. You could have another assessment. This could reduce or stop your PIP payments.

Personal Independence Payment 

Benefits that depend on how much you earn

If you get ESA and you start earning over £143 or working for more than 16 hours a week, you may have to claim Universal Credit.

The amount you can claim depends on how much you earn and if you are also claiming Housing Benefit.

Use a benefits calculator to see how much money you could get.

You can claim Employment and Support Allowance (ESA) and be self-employed if you are doing ‘permitted work’. To qualify, you need to be working for less than 16 hours a week. Your average net profits also need to be less than £143 a week. Talk to your work coach if you want to do permitted work.

Employment and Support Allowance

Universal Credit

To claim Universal Credit, you have a claimant commitment. This describes what you and your partner must do.

You will have a Work Capability Assessment on the phone to see how your condition or impairment affects your ability to work.

There are 4 groups with different requirements:

  • work search requirement
  • work preparation requirement
  • work focused interview requirements
  • no work requirements

Your work coach may ask you to prove that your work is useful and productive to claim Universal Credit. The Department for Work and Pensions (DWP) call this 'gainful' employment. They'll ask about your:

  • clients
  • suppliers
  • appointments
  • business plan

Work search requirement group

If you're in this group, you must prove that your self-employment is 'gainful'.

Your Universal Credit will depend on what you earn in the first 12 months. The DWP call this the 'startup' period.

If you have another job as well as being self-employed, your earnings may be deducted from your Universal Credit payments.

Warning Changes because of coronavirus

Before coronavirus, Universal Credit assumed that you were earning national minimum wage at 35 hours a week no matter how much you earn. This is called the 'minimum income floor'.

The minimum income floor will not apply to any self-employed people until after 31 July 2021.

Your work coach might be able to extend the suspension of the minimum income floor. They should do this if you can show that coronavirus has affected your income.

You may receive more Universal Credit if you have both:

  • been self-employed for more than 12 months

  • been earning less than the equivalent of minimum wage at 35 hours a week

Work preparation requirement group

In this group you must do 'work-related activity' to help prepare you for work. Developing a business plan can count as work-related activity if your work coach agrees that your self-employment is 'gainful'.

Your Universal Credit will depend on what you earn.

Work-focused interview requirements group

You need to go to interviews at Jobcentre Plus to talk about your plans for returning to work. You do not have to look for work or do work-related activities.

Your Universal Credit will depend on what you earn.

No work requirements group

You can be self-employed and you’re not expected to look for other work. You can claim Universal Credit, which will be calculated using what you earn.

Last reviewed by Scope on: 04/06/2021

Was this page helpful?

We're sorry to hear that.

Tell us how we can improve it
Opens in a new windowOpens an external siteOpens an external site in a new window