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Self employment and benefits - What if I have less work than usual?

If you or your partner are working, or thinking of starting work, as a self employed person you might qualify for welfare benefits to top up your income.

The benefits you are entitled to will depend on a number of things, including your age, the number of hours you work and how much you earn.

What if I have less work than usual?

If there is a downturn in your business and you have less work than usual or no work, you might be able to claim benefits for the first time or the amount of your benefits might increase.

If you are still working full time but your income has dropped, you might qualify for Working Tax Credit for the first time or the amount you get might increase. For Working Tax Credit purposes, working 'full time' could mean 16, 24 or 30 hours depending on your circumstances. For further details see Can I get self employed tax credits? (Working Tax Credits).

The amount of Working Tax Credit you get is worked out using your income for the last tax year. If the downturn in your business means that your income this tax year is likely to be more than £2500 less than it was the year before, the amount of Working Tax Credit you are paid could increase. You should give the Tax Credit office an estimate of your earnings this tax year and they will work out if your Working Tax Credit payments can be increased.

If you have not stopped working, but have reduced your hours and are working less than 16 hours a week you might get Jobseeker’s Allowance. It can be difficult to get Jobseeker’s Allowance if you have only temporarily reduced your hours. The rules for calculating hours of work could mean that your average hours are worked out over a year. You might be classed as working at least 16 hours even though you are actually working less.

If you claim Jobseeker’s Allowance you will have to look for full time work. This includes looking for work with other employers not just self-employed work and not just extra work for your business.

If you have stopped working in self employment altogether you will be unemployed and might get Jobseeker’s Allowance.

If you have a mortgage, it might be better for you to work less than 16 hours and claim Jobseeker’s Allowance as Working Tax Credit does not include help with mortgage payments. You will need to work out which benefit you will be better off claiming. You can use our Benefits Calculator to find out.

The rules are complicated and it can be difficult to know which benefits to claim. If in doubt, seek advice from a benefits adviser. You can use our Find an Adviser tool to find a local one.

Your hours of work will not affect:Pension Credit, Housing Benefit (England, Scotland, Wales), Housing Benefit (Northern Ireland) or Council Tax Support.





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