Universal Credit


Artists in Northern Ireland are being challenged by a range of uncertainties. Brexit is casting a looming shadow, but with so many unknowns about the nature of any withdrawal agreement, it is very hard to put plans in place that will mitigate against potentially negative impacts. But even before Brexit comes into effect, there is another issue that is already having a significant impact on the livelihoods of artists in Northern Ireland – that of the United Kingdom’s new benefits scheme, called Universal Credit.

Universal Credit is the new ‘simplified’ benefits system that combines Jobseekers Allowance, Housing Benefit, Working Tax Credit, Employment and Support Allowance, Child Tax Credit and Income Support into one single payment. Universal Credit was initially announced by the Conservative government in 2010 and has slowly been rolled out across the UK since 2013, reaching Northern Ireland in late 2017. If you make a new application for benefits today, you will go straight into the Universal Credit system, while anyone on existing benefits schemes are currently being migrated to Universal Credit. If you are still receiving benefits under one of the old schemes, any significant change in your circumstances may trigger your automatic migration to the new system. This includes changes to your employment status, address or family details. 

However, the switch to Universal Credit is not just a change to a more ‘streamlined’ system. It also changes how benefits are calculated. Depending on your individual circumstances, the amount of benefits you will receive may change quite dramatically compared to the old system. You can use an online calculator to work out how much you may receive (entitledto.co.uk). As you earn more from your employment or self-employment, the amount you receive will reduce. 

Universal Credit and the various benefit schemes it aims to replace are designed to support people with no or low income. Many artists fall into these categories, often relying on part-time jobs to supplement income from their artistic practice. There are three aspects of Universal Credit that will significantly affect artists: The Minimum Income Floor; proving that you are ‘gainfully self-employed’; and managing monthly fluctuations in your income and expenditure.

Most artists are self-employed and in order to qualify for Universal Credit, HM Revenue & Customs (HMRC) must determine whether you are ‘gainfully self-employed’. They define this as having “self-employment in a trade, profession or vocation [that] should be your main occupation. It must also be organised, developed, regular and carried out in expectation of profit”. To do this we recommend that you have a business plan that demonstrates your strategic priorities and financial projections for the coming year. If you are also employed, they will decide if self-employment is your main occupation, based on the number of hours worked and the income you generate from it. If they decide you are not gainfully self-employed as an artist, your ‘work coach’ will expect you to commit to looking for a job, or you must decide not to claim any benefits.

The second aspect of Universal Credit that artists will find challenging to manage is the Minimum Income Floor (MIF). The Minimum Income Floor is a figure based on the number of hours you are available to work per week (usually 35) multiplied by the National Living Wage (currently £7.83 and rising to £8.21 in April for those over 25). Universal Credit assumes that everyone will earn this amount each month. If your self-employment income is less than that, your benefits are calculated from that figure instead of your earnings. Your work coach may ask you to make efforts to increase your monthly income to meet the Minimum Income Floor.

If you have been registered as self-employed for less than a year, then you may be entitled to a ‘start-up period’ of a year to develop your business, where the MIF does not apply. 

Universal Credit comes with more onerous reporting requirements and you must submit details of your income (profit) every month. Whereas the old systems averaged your income and expenditure out over the whole year, the new system calculates your benefits on a monthly basis.

This system works if you have a regular monthly income and should help people avoid cases where they might be asked to repay money due to mid-year changes to their work circumstances. The challenge for artists is that this does not allow for monthly or seasonal fluctuations in your income. If you do not generate any income for several months (while your are producing a new body of work for example), you may be asked to look for new work, and may be subject to sanctions if you do not meet this responsibility. Conversely, if you generate a larger amount of sales in a short period (due to an exhibition or commission for example) you may be refused benefits for that period and subsequent months, due to generating a higher income.

As mentioned above, every person wishing to claim Universal Credit will have a ‘work coach’ assigned to them and you must attend an interview with them for your application to be approved. Many people find this interview intimidating, but when you consider the additional complexities of the needs of a self-employed artist in relation to the benefits system, it can become a daunting prospect indeed. The interview is important, as is your relationship with your work coach, because the sanctions they can impose (cuts to your benefits) can be severe and can last for up to three years.

There are independent welfare advisors who can help you prepare for your interview and application. You can contact an organisation such as Advice NI (adviceni.net) or Citizens Advice (citizensadvice.org.uk) for help. 

Rob Hilken is Northern Ireland Manager of Visual Artists Ireland. 

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