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Self-Employed Will Lose £4,000 Under New Universal Credit Rules

elizabethelden
26th March 2018, 10:00 AM
  • Changes to Universal Credit will hit self-employed workers
  • They’ll miss out on top up payments during bad months
  • Uber drivers and Deliveroo riders included in those who will miss out
Universal Credit changes will affect thousands of self-employed workers. Image: Getty

78% of self-employed workers will lose up to £4,000 a year in benefits when Universal Credit rolls out, according to a new report.

New rules in the frequently criticised benefits system means that workers whose earnings fluctuate between months, will miss out on top-up payments in months with lower earnings.

Consultancy firm, Policy in Practice, said four fifths of gig economy workers who don’t receive a regular salary, will be hit by the changes.

Uber drivers and Deliveroo cyclists are among the workers likely to be affected, according to the firm.

Universal Credit has been heavily criticised since it was first introduced, and has resulted in an increase in food bank usage, as well as changing eligibility for free school meals.

Senior MP Frank Fields said the changes are are another “razor cut at the vulnerable human underbelly of the labour market.”

Universal Credit, which is currently being rolled out around the country, allows for low-paid workers to claim handouts to top up their income.

But for the self-employed, there will be a cap on the amount they can claim based on a so-called ‘minimum income floor’, calculated as the minimum amount they should expect to earn while working full-time.

When they fail to meet that target, their benefits will no longer be increased to make up for it, and if they earn over it, their handouts are cut.

Earnings are calculated on a month-by-month basis, meaning workers whose pay varies throughout the year will see huge swings in the benefits they get too.

The firm found that 78% of the self-employed will lose out as a result of the changes.

The average financial hit will be £344 a month- which adds up to over £4,000 a year.

People setting up a business have a year to establish themselves before they will be affected by these changes.

The Department for Work and Pensions said, “Universal Credit supports self-employed people for up to a year while they establish their business; however it is not designed to prop up unviable businesses.

“If, after a year, the business isn’t meeting the minimum income floor, and someone wants to continue to receive benefits, they will have to either increase their self-employed earnings of look for other work.”

Will you be affected by these changes? Let us know in the comments.

Comments
misslord2018
misslord20182 years ago

not acceptable and appalling

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MariaBently
MariaBently2 years ago

Thanks

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Bestdealsguru
Bestdealsguru2 years ago

They don’t have a clue how hard it is for the self employed especially in the North or deprived areas where there are far less opportunities. You normally have to split up your whole years earnings into months not just live like a king on a good month and a pauper on the rest.

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Jaycee5
Jaycee52 years ago

No, and it is happening when people are being forced to go self employed at risk of sanctions when it is not something that they are necessarily suited to. Most people want to work but they are hammered in every direction.

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wthkv
wthkv2 years ago

If you're not happy tell your mp your not going to vote for their party and if you want to change get them make it fair. I would like to see mps have a wages cut. No freebies food and wine free taxis the list goes on

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wthkv
wthkv2 years ago

How many mps are on LatestDeals.co.uk looking for bargains...

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Bestdealsguru
Bestdealsguru2 years ago

I don’t bother voting for anybody anymore I don’t really see any difference between them nowadays.

I don’t agree with different parties, I would like to see a UK success party with no politics and all the cabinet jobs go out the market to get experts in their field, not just chosen from the favourites of who ever was elected.

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