What it is
The minimum income floor is the amount of money an employed person in a similar situation to you would earn on the National Living Wage or National Minimum Wage, after tax and National Insurance.
So if your floor is set at a figure and you earn less than it in an assessment period, Universal Credit uses the floor rather than what you actually earned. Earning less does not increase your payment.
It only applies if you are gainfully self-employed
gov.uk says you are "gainfully self-employed" if your self-employed work is:
- Your main job or main source of income
- Organised, for example you keep records of your business activities
- Developed, for example you have a business plan or are advertising the work you do
- Regular, for example you have steady work now and in future
- Expected to make a profit
Being gainfully self-employed also means you do not have to look for other work, so the same decision that brings the floor in is the one that lets you concentrate on the business.
The start-up period
gov.uk describes a start-up period as "up to 12 months when you can focus on growing your business". During it your actual monthly earnings are used and the minimum income floor does not apply.
- You are only entitled to one start-up period, unless it has been more than 5 years since your previous one.
- When it ends, the floor starts being used to work out your payment.
Why the month-to-month figure matters
Because the floor is applied per assessment period, a month where you earn under it is a month where the shortfall is simply lost. Knowing where you stand while the month is still running is the only point at which you can do anything about it.