You Might Like
Self-Employed Universal Credit Claimants Told They’re ‘Better Off Jobless’
Universal Credit have been told by government advisors they’d be better off jobless, risking further turmoil for the crisis-hit benefit reform.
The shock advice emerged as thousands of sole traders, from window cleaners to hairdressers and others, move onto the flagship programme to receive entitlements such as working tax credits.
But the changes introduce demands so stringent some entrepreneurs are being told they may as well shut down their business and sign on to the dole, while others say strict rules have left them reliant on food banks and charity handouts.
In messages seen by HuffPost UK, one claimant was told by an official they “would not have a sanction applied” if he chose to end his trade and became unemployed.
said in August: “The incentives and support we have put in place are helping people into work and to stay in work, contributing to the UK’s record-high employment rate.”
And former Prime Minister David Cameron, who oversaw the reforms in Downing Street, once urged “more people to make a job than take a job”.
But the Federation of Small Businesses, which represents traders, told HuffPost: “As it stands, Universal Credit poses a real threat to entrepreneurship in the UK.”
As it stands, Universal Credit poses a real threat to entrepreneurship in the UKFederation of Small Businesses
HuffPost revealed last week how a “hidden” clause restricting in-work benefits has begun to affect some of the 800,000 strivers who, according to an influential think tank, will eventually be required to move onto the new system.
Universal Credit has already been plagued by problems, including a perilous six week wait in payments, a surge in the use of loan sharks and food banks, and rip-off fees to call its helpline.
Now more than a dozen traders on the flagship programme have told HuffPost how the system’s treatment of the self-employed has left them struggling to keep afloat.
‘They’ve backed me into a corner’
Welder Andy White, from Gorleston, Norfolk, said the imposition of a ‘minimum income floor’ (MIF), whereby the government expects traders to earn at least £1,049 a month or see in-work benefits deducted, has left his family with less than £100 a month after paying rent.
figures from the Office for Budget Responsibility.
“It’s been a tough few months and I haven’t earned anywhere near the fictitious income level they’ve demanded,” White told HuffPost. “I’ve paid into National Insurance for years and years, yet now I need a little help it’s not there.”
White has had to rely on food banks and charities to support his partner and their child.
One advisor told us he was off for two weeks in the Maldives while we were explaining to him we were going to food banksAndy White, Norfolk
After being told of the MIF, White proposed a new business structure which would see his partner handle marketing and spending up to 16 hours a week drumming up new business.
“They just didn’t want to know. In their eyes, my partner wouldn’t be gainfully employed,” he said.
“We’ve been treated disgracefully by the job centre,” White, who has been a welder for over a decade, added. “One advisor told us he was off for two weeks in the Maldives while we were explaining to him we were going to food banks.”
Despite the promise of work in the coming weeks, the family’s dire finances are so pressing White said he has been forced to consider leaving the family home or closing down his business, despite years of experience as a metal fabricator.
“If I moved out, my partner would be a single parent and we wouldn’t be on the same claim,” he said.
Message logs from White’s online account reveal weeks of conversations with Department for Work and Pensions (DWP) advisors over his options.
couple with one child, with a stable salary of around £12,000 a year, would earn £1,000 a month from employment, topped up with approximately £500 of in-work support.
But a self-employed worker also earning £12,000 over the course of a year may take home a different amount from month-to-month. For instance, earning an extra £200 in a given month would reduce their entitlement by £90, while taking home £200 less in another month would increase their entitlement by just £5. This is because the minimum income floor restricts their entitlement in months where earnings are lower than a full-time worker on the minimum wage.
Source: Resolution Foundation
‘I feel like giving up’
Retailer Nicola Smith said the rules are so arduous she is now considering shutting her shop in Kendal town centre despite years remaining on the lease.
