Universal Credit - self employment web forum

The Committee would like further written evidence on Universal Credit (UC), drawing on points raised at our evidence session on 29 November. This evidence will inform us in our rolling programme of work on UC.

Send us your views

Earlier this month we did some calculations which showed that under Universal Credit, a self-employed parent of two is £300 a month worse off than an employee earning exactly the same in a year. This is because of the way Universal Credit is calculated for self-employed people whose income fluctuates month to month.

On November 29 we asked a panel of experts what were the next biggest priorities to fix Universal Credit, and they told us it’s the Minimum Income Floor and making UC work for self-employed people.

The web forum will be open until Tuesday 9 January 2018.

If you would like to submit a comment but do not want it to be made public in this forum, please start your post with NOT FOR PUBLICATION.

Specifically, we are interested in your answers to any of following questions that apply to you:

  • What has been your experience of claiming Universal Credit as a self-employed person?
  • Have you been affected by the Minimum Income Floor? If so, how and why?
  • What changes would you make to Universal Credit for the self-employed?
  • What is the nature of your business and how long has it been operational?

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Universal Credit - self employment


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7 Responses to Universal Credit - self employment

Susan Rogers says:
December 11, 2017 at 04:42 PM
I set up as self employed so that I could care for my elderly parents, one with dementia, the other with MS, Leukaemia and Bowel Cancer. Neither of them wanted to go into a care home and I would not have forgiven myself if I had left them no choice but to do so. I gave up a teaching career to provide care for them. This saved the state THOUSANDS of pounds in social care costs. I, on the other hand, went from a very good wage to living month by month, not knowing whether I would be able to make ends meet. I set up as as self employed, utilising my existing skills and slowly built up a client base of people wanting me to write training resources for them. Without the Working Tax Credit - soon to be Universal Credit in my area - I would not have stayed mentally healthy enough to continue to look after the care needs of my parents. When I initially read about the base assumption that I would be treated as earning the national minimum wage - and therefore would not qualify for Universal Credit, I was distraught. People become self-employed for different reasons. I was resourceful enough to be able to become self employed as it was the ONLY WAY I could provide care for my parents. The nature of my business means that I can work during the night, fitting my work around the needs of my parents. I do not get a guaranteed monthly wage. I wish I did, but self employment doesn't work like that. I do not deliberately keep my earnings low - why would I do that? Self employed people cannot be assumed to be earning a minimum wage. There are lots of reasons why they cannot - and I hope my personal example will give you something else to think about when considering further evidence.
paul dixon says:
December 08, 2017 at 02:24 AM
i work as a childrens entertainer and have done for the past 20 years or so it is only recently that i have received any help through working tax credits,my work like most people in the arts fluctuates ,in january and february after christmas it is always quiet but picks up again in march ,there is no way that i would make enought to receive any universal credit this would leave me at the mercy of the food bank during those months and struggling to pay my bills at the time that i need the help the most,i do not want to sign on, which you are forcing us into doing,i live in a small town where unemployment is very high i am in my 50s and have complications through diabetes,i would find it very difficult to get other employment,i urge you to look at the mif as this wpuld crate a lot more unemployment at present i receive help of £53 a week if i signed on i would get 76 pounds a week plus other benefits ,where is the sense in that /
Helen Earl says:
December 07, 2017 at 08:52 PM
I am a lone parent of a 6 year old daughter. I set up a business offering Personal Assistant services to the elderly and vulnerable in order that I could work around my daughters school hours and holidays.

I assist my clients with shopping, cleaning, medical appointments, admin, gardening, companion - the list goes on.

There are currently 19 clients on my books that have a regular visit either weekly or fortnightly, varying from one to three hours.

I am with clients 23 or 23.5 hours per week, 915am to 245pm. Outside of those actual paid hours I respond to emails and calls from clients families and friends, authorities such as social services and mental health teams. I reasearch clubs and associations and events that clients could attend. There are new client enquiries and new client visits. Not forgetting normal business admin like invoices, rota's ...

I am not currently on Universal Credit and I fear that when my area does go live that I will have to close my business.

Even working the hours above, taking away very minimal expenses, I would not achieve the current MIF. I do not have any physical way of increasing the hours that I work - unless I pay out for child care which defeats the purpose!

Yes, I could increase my hourly rate - this would mean that clients who are in receipt of attendance allowance are then paying for my services out of their own pocket. It would mean that many elderly and vulnerble simply couldn't afford help that they truly need.

Sometimes a client has to cancel my visit due to medical appointment or illness. This is through no fault of my own, yet on UC it would be deemed that I would not reach my target of working 25 hours a week and it would affect the golden goal of achieving the MIF.

I fully support the notion that the government cannot continue to support non-profitable businesses.

I do not support the amount of businesses that are having to close - through no fault of their own - due to the current and imminent changes caused by Universal Credit.

It is appalling that just because I am self-employed (and a lone parent) that my potential Universal Credit receipt would be vastly different to that of an employed lone parent working the same amount of hours. Not to mention that an employed person is allowed to take holiday and sick pay but a self-employed person is penalised for doing so. That's not exactly equal rights is it!

My work isn't seasonal but how is UC fair in any way on self-employed businesses such as gardeners and photographers? How is it fair on businesses such as self-employed builders, decorators etc who might have a very large job one month, but only small ones the next?

UC needs to be paused, people who it is and has actually affected need to be spoken to and whereas there will never be pleasing everyone, a fairer and more level based system needs to be implemented.
Francesca Rao says:
December 07, 2017 at 05:20 PM
I am extremely concerned about the introduction of UC in my area, I am a self employed single parent who currently receives tax credits, this allows me to look after my children and run a small business from home. When I made the decision to become self employed while caring for my children, the advice given to me by my advisor at the job centre led me to make certain life choices thinking that the amounts I now earn would be acceptable and I would be covered by tax credits until my youngest was 16. The rules have now completely changed, by introducing the Minimum Income Floor I will now most likely lose a great deal of the benefits I currently receive. This to me seems unnecessarily cruel, I contribute a great deal by running my business and changing the goal posts this way will create a lot of misery, especially to families with young children.
C. Bowden says:
December 07, 2017 at 03:38 PM
I've been self employed for a few years. I'm expecting my third child. When on Tax Credits my pay-out was not effected by claiming Maternity Allowance. I've now been moved onto Universal Credit and have just found out my Maternity Allowance is being deducted £1 for £1 of my UC pay out. Meaning that it has gone down to £0 a month making me more then £500 a month worse off then I was when I was still on Tax Credits.

This is unfair as while I'm on Maternity leave I'm not allowed to work so no income is coming in. While somebody who is employed but on maternity leave will receive SMP and this is classed as income rather then a benefit and is NOT deducted £1 for a £1 as it is for the self employed. Unfairly penalising the self employed.

Also, because my Maternity Allowance is being deducted off my UC payment I'm getting £0 for my childcare cost. I can't just pull my other kids out of childcare just because I'm on maternity allowance (an employed person wouldn't have to). Im tied into a contract with my childcare provider, not the mention of the stress on a little toddler by taking them out of childcare then putting him back in a few months later. This is not right.

I'm basically hundreds of pound a month worse off then the same person under the same circumstances receiving tax credits.

Not the kind of news you want to find out when your 30 weeks pregnant! Wish I never been honest and not told HMRC about my change of circumstance that made me move onto UC half way though my pregnancy and loose out so much money. Very stressful.

Its a cheeky way of basically scrapping maternity allowance for the self employed because whats the point in applying if it all gets taken off my UC payout?
Claire Stoyle says:
December 06, 2017 at 08:16 PM
I run an online support group for self employed single parents. Universal credit is, and will be, a disaster for people caring for children aswell as trying to work for themselves. It takes time to grow and not only one year, or even two or three. Some of the biggest companies even have yet to make a profit. Parents should be encouraged and supported in their entrepreneurship and not forced to give up, which is how people feel and what is happening. The result will be mass unemployment. Single parents should not be treated the same as single people with no children - which they currently are. In this country it seems children are being forgotten about and family means nothing to the government, or the rights of a child. Children really need a parent present and yet currently many children are neglected because parents are pushed from pillar to post to satisfy the government that they are really trying to work at all costs - sadly that may be at the cost of many children.35 hours is too long to be job searching or working when a child is 13 - there may be many reasons that this is not feasible - lack of a suitable job/child has needs that mean they cannot be left /home education - and no child should be expected and required to stay at home alone at age 16 when they do not feel safe or happy, which they currently are, as the parent is forced to work at all costs. Self employment offers a balance to single parents who want to care for their own children, and should be encouraged and supported to do so. Single parents are working very hard in legitimate businesses and I know that they all want to continue and make a success of this. I think the government must believe that we are not serious if we do not meet the NMW, but we are. Many single parents are incredibly aspirational and ambitious - but you cannot expect them to achieve this success within a certain time frame.The huge tragedy is also that currently after one year if someone is not making nmw then they will not be supported to do so again for 5years, and then it has to be something different. So basically if you are a single parent family then with UC the self employment dreams of so many will die. The minimum income floor within universal credit needs to be completely scrapped and instead people need to be encouraged to succeed. But at the very least it needs to be scrapped for single parents. Please see my petition and click 'join the conversation' to view comments. Everyone is incredibly scared of universal credit and worried for the future, instead they should be feeling hopeful and optimistic as they embark on their entrepreneurial ventures. MIF does not treat the self employed fairly. It is outright discrimination to base a person's entitlement upon fictitious earnings. Wwhen we look at society today, we see a huge mental health crisis, especially amongst the young. Please do not be so short sighted to think that a child does not need a parent at home if possible - support and value single parents and the amazing job that they are doing - be proud of them and show that you have faith in them by scrapping the minimum income floor for them and showing that you value family and care of children and that you will encourage and support single parents in their ventures. I work in a voluntary capacity with single parents who are self employed and am one myself. I am more than happy to help, to discuss ideas and ways to work with this community in a positive, proactive, forward looking way, to the benefit of everyone. The wait for UC is also far too long and we see constant stories online, harrowing accounts of people being made homeless and having no money - this is not a rare occurence, it is happening all the time. The uc payment itself is not enough - due to the budget for DWP and the UC project being continually cut I believe, and assume this is maybe one of the reasons why Ian Duncan Smith actually resigned. It is all a shambles - believe me that people are terrified. This is not the way we want our country to be. Please think again and consult with ordinary people, on how to get this right.
Katharine Duke says:
December 06, 2017 at 12:03 AM
Self employed earnings cannot be assessed on mif ... fluctuations in earnings naturally occur throughout the year and in order to support uk small businesses, a yearly income needs to be used not some fictional figure.