Self-employed Universal Credit ‘worth’

Self-employed workers on Universal Credit you may receive much less than the employees who earn the same amount of money, a charity has said.

Citizens Advice said that a bad month of self-employment, the income would not be saved by the new benefit.

He suggested a self-employed person earning £ 9,750 a year, £630 worse under Universal Credit compared to an employee in the same circumstances.

The government said that the system encouraged them to grow their business.’Loophole’

Universal credit is a new benefit for people of working age, replacing six benefits and their fusion into a single payment. They include income support, income-based jobseeker’s allowance, income-related employment and support allowance, housing benefit, child tax credit and working tax credit.

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However, Citizens Advice said it had presented a “loophole” which meant a self-employed actor who has earned less than a national minimum wage of a month would not be the difference made by their Universal Credit payment.

On the contrary, if their monthly income is gone beyond the minimum wage level, the benefit payment will be reduced accordingly.

The charity said that this was unfair and risked causing financial difficulties, such as self-employed workers often earned different amounts from month to month.

It cites the case of a family that, in order to get more money through Universal Credit, has seen the father to give up his computing and stop working altogether, while the mother cut short her maternity leave to return to work.

Gillian Guy, chief executive of Citizens Advice, has said Universal Credit is still more suitable for those with regular jobs, despite a rapid increase in self-employment.

“The government has shown that it is ready to take action to improve Universal Credit as new facts come to light – an approach strongly support,” he said.

“Now he needs to look again the design of the benefit to ensure the self-employed workers and agency workers are not left at a financial disadvantage.”

A Department for Work and Pensions spokesman said: “The Minimum Income Floor encourages people who are not earning enough through self-employment to grow their business, or take on more hours of work.

“Universal Credit is a flexible benefit that supports people in and out of work, those on low incomes and the self-employed, and that happened.”