Universal Credit roll-out delayed

(2 minutes to read)

At the end of 2018, the IPSE urged the government to tackle Universal Credit’s structural bias against the self-employed, saying that UC has a negative impact on the sector, disincentivising workers and employees.

The self-employed will be breathing a sigh of relief in learning that the roll-out of Universal Credit is being delayed.

The IPSE has welcomed the decision to halt the UC roll-out, while at the same time urging the government to reform the parts of the policy that punish the self-employed.

At the end of last year, the IPSE told the London Assembly Economic Committee that an extended period is needed in order to fix a ‘creaking system that unfairly punishes the self-employed and disincentivises people from striking out on their own’.

For example, a self-employed individual can find themselves up to £3,000 worse off a year compared to employees because the MIF does not account for the fluctuating nature of self-employed earnings.

To address this structural bias, IPSE wants to see the MIF’s exemption period extended from 12 months to three years and – to accurately account for fluctuating self-employed earnings – calculated on a quarterly or annual basis.

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IPSE’s Policy Development Manager Jordan Marshall commented, “Self-employed people can be thousands of pounds worse-off each year under Universal Credit compared to full-time employees making a similar amount.

“This is because Universal Credit calculations don’t account for monthly fluctuations in self-employed income.

“IPSE is calling on the Government to use the delay in the roll-out to fix these flaws which punish the self-employed.

“Unless the system is reformed, Universal Credit will continue to sap the incentive to run your own self-employed business.”

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