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UK govt accused of blocking self-employed access to Universal Credit

By Iain Gilbert

Date: Tuesday 17 Jul 2018

UK govt accused of blocking self-employed access to Universal Credit

(Sharecast News) - The government's refusal to change its stance on monthly calculations for Universal Credit payments continued to unfairly punish the self-employed, a worker lobby group said on Tuesday.

The Association of Independent Professionals and the Self-Employed (IPSE) said it was "disappointing" that the government hadn't listened to the repeated warnings of industry, trade unions and the self-employed.

The government ruled out making changes to the controversial system in its response to a report from parliament's Work and Pensions Committee.

It claimed that volatile earnings and expenses were an "entirely normal" feature for many self-employed people.

"The government's view is therefore that fluctuating earnings are something self-employed UC claimants need to plan for, just as other self-employed earners do," it added.

However, committee chair Frank Field said the government "encourages self-employment and then pulls the rug away. It withdraws vital support too early."

"Genuine self-employment is a cornerstone of our economy, and growing in significance. A policy that penalises entrepreneurship and stifles viable businesses this way is simply counter-productive, for individuals working hard to get a business up and running, for the Treasury and for the economy as a whole," added Field.

Universal Credit includes a Minimum Income Floor (MIF) for self-employed claimants which kicks in just 12 months after a business is set up.

Under this system, the amount of credit received is calculated on the basis that they earn at least that amount every month, whether they actually do or not.

For most people, the MIF is the equivalent of 35 hours per week at the National Living Wage, or £1,138 a month. Self-employed claimants can lose out in this system because they can have volatile incomes, Field's committee reported last year.

Jordan Marshall, the IPSE's policy development manager, said: "By not considering the fluctuating nature of self-employed income, the Minimum Income Floor can leave the self-employed up to £3,000 worse off each year compared to an employee earning the same amount."

While the government has agreed to review the impact Universal Credit has on the self-employed by the end of 2019, Marshall said this would be nothing but "cold comfort to the many who are struggling in a system that is not fit for purpose".

The government support payment, which was supposed to consolidate benefit payments, has been beset by problems since inception. A recent National Audit Office report warned it was not delivering value for money and could end up costing more to administer than the system it is replacing.

Work & Pensions Secretary Esther McVey was also forced to apologise twice for misleading parliament over the report's findings. NAO chief Sir Amyas Morse broke with convention and wrote publicly to the minister over her misrepresentations of the investigation.

Attempts by the Labour party to have McVey sanctioned for her handling of the rollout of Universal Credit failed last week.

A Commons motion calling for her pay to be docked was rejected by a vote of 305 to 268.

(Writing by Frank Prenesti)


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