Yet another problem with Universal Credit, why are there so many problems, are the Civil Servants who provide guidance to Ministers not up to the job, or is it Ministers ignoring the advise, or both? Will we ever know as no one is ever held accountable.
Accountability needs to be a priority as does Legislation to be drafted correctly and when problems do occur for these to be dealt with expeditiously so not to cause hardship on the vulnerable.
The UK Government’s flagship Universal Credit reform is “designed with little regard for the reality of self-employed work” and risks damaging aspiration and entrepreneurship, according to a damning new report from the Commons Work and Pensions Select Committee.
The cross-party group of MPs say the current design of Universal Credit (UC), which replaces a number of existing social security benefits and tax credits, poses a “very real risk” to the self-employed and could dampen the enthusiasm of anyone thinking about setting up their own business.
In order to qualify for UC self-employed workers must demonstrate that their business is financially viable within a year of claiming, which the Committee says fails to recognise the difficulties and complexities of setting up a business and the time it often takes to turn a healthy profit.
Failure to meet this requirement within the one year time limit wold mean the claimant ceases to qualify as “gainfully employed”, resulting in a sometimes dramatic drop in how much UC they receive.
This is known as the “Minimum Income Floor” or MIF and is currently set at around £1,000 per month. If a person fails to meet this strict eligibility requirement within a year of becoming self-employed, or first claiming UC, then they are no longer deemed to be “employed” and face losing some or all of the difference through lower UC payments, depending on other circumstances such as childcare costs.
The Committee states: “The way the MIF is applied, based on monthly reported income, also penalises the self-employed with their fluctuating income. This can mean they miss out on important support potentially to the tune of over £2500 a year.
Source: Universal Credit ‘designed with little regard for the reality of self-employment’, say MPs : Welfare Weekly