Self-employment: Gainful self-employment

A claimant is in gainful self-employment if the Secretary of State has determined that they are carrying on their activity as their main employment, the earnings from it are genuinely self-employed earnings, and it is organised, developed, regular and carried on in expectation of profit.

Whether a claimant is in gainful self-employment for UC purposes is important because it may have an impact on the claimant’s work-related requirements and it also determines whether:

  1. minimum income floor applies to the claimant’s S/E earnings
  2. the claimant is eligible for a start-up period (see below).

The claimant will be asked to provide evidence of their self-employed activities usually at a ‘Gateway’ interview shortly after the UC claim has been made.

There are important factors to be considered carefully, for instance, how long the business has been running, whether it is a new business or long-established, how much income is received from the business, that work is done in expectation of profit, how much work is in the pipeline and so on. This list is not exhaustive and while the determination of gainful self-employment will often be straightforward, there are many cases where several factors need to be weighed up to reach the correct conclusion.

ADM Chapter H4020 provides more information about how DWP will determine whether someone is in gainful self-employment.

Updated 7 March 2016