The Association of Independent Professionals and the Self-Employed (IPSE) have welcomed the recent advice from the Work and Pensions Select Committee. It has been suggested that due to the negative affect minimum income floor can have on Universal Credit (CU) claimants, a review must be carried out and in the meantime, should not apply to these self-employed workers. IPSE presented evidence at a select committee hearing on the matter, where it called for the minimum income floor to take account of income volatility – an issue that can affect a significant number of self-employed people.
Simon McVicker, IPSE Director of Policy, commented, “The Select Committee is absolutely right to flag up its serious concerns about this issue. When you are self-employed, you can have good months and bad months, which leads to a very volatile income. This leads to many problems with the minimum income floor, which can mean people losing access to universal credit. To put it frankly, Universal Credit is a nightmare if you work for yourself.
“It would be fundamentally wrong to deny someone access to Universal Credit simply because they are self-employed. The Government needs to urgently look at how it interacts with the self-employed. If they don’t get this right, it could put a lot of people out of business.” Just a few weeks ago, the Low Incomes Tax Reform Group (LITRG) called for changes to UC for the self-employed, warning that without them there is a very real possibility that people will be discouraged from starting self-employment and existing claimants may be forced to give up their work. The changes LITRG is arguing for include:
- Allowing self-employed claimants with fluctuating income to average their income over a period of up to a year
- Changes to the calculation of the ‘minimum income floor’ and increasing the start-up period during which it does not apply from one to two years
- Greater consistency in definitions of self-employment
- More specialist support for self-employed universal credit claimants
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