New Enterprise Allowance scheme - My story

Andy2013

https://www.gov.uk/government/public...s-2012-to-2013

I think I must have linked directly to the pdf. This link should work.

Thanks will have a good read through this later, love a good stat.

Self employment is really hard , it takes a certain type of person to make it work and the early days will always be the toughest because your trying to learn how to do things , figure out why bits go wrong and was It your fault, etc.

It takes a long time to be better of in self employment rather than benefits but it does make you feel a whole lot better , its just a shame that normal everyday people don't run the government, things would be different then.

My goal when I started the business was to pay tax, it sounds crazy but it meant I was doing ok , over 10k per year profit which seemed years away at the time, next years tax return is going to be considerable and it makes it all worth it.

tomterm8

dktreesea wrote: »

The low income self employed are the current government's experiment. They want to see what happens when they limit support to this group.

When you look at the conservative proposals they are a lot less severe than some people fear. I don't think the conservatives are against people going into self-employment: they, after all, improved the NEA scheme and have widened it.

Universal Credit is actually reasonably generous. You're given a year to prove a business, during which time the government is basically paying your living expenses. Even after that time, all the government is asking is for you to look for ways to increase your income.

I'm not even a Conservative... I'm a socialist... but I don't think that people should be able to languish running nonviable businesses forever.

dktreesea

tomterm8 wrote: »

When you look at the conservative proposals they are a lot less severe than some people fear. I don't think the conservatives are against people going into self-employment: they, after all, improved the NEA scheme and have widened it.

Universal Credit is actually reasonably generous. You're given a year to prove a business, during which time the government is basically paying your living expenses. Even after that time, all the government is asking is for you to look for ways to increase your income.

I'm not even a Conservative... I'm a socialist... but I don't think that people should be able to languish running nonviable businesses forever.

We let hundreds of thousands of people languish in unemployment year in, year out. At least the self employed are trying to make a go of it, often in very limiting circumstances, e.g. lack of transport, lack of capital, unsuitable premises. And for no group is this more the case than the previously unemployed, lured into self employment by not so well meaning DWP job centre advisors. Talk about jumping from the frying pan into the fire.

This government isn't just asking you to look for ways to increase your income. They're cutting the subsidy substantially, if you haven't "made the grade" , i.e. produced a profit equivalent to the FT NMW plus however many hours your spouse, if non working, would be required to work. Most people running shoestring businesses are going to have no choice but to close up shop and claim jsa instead. What if the government, keen on preventing this from happening, introduce a 6 month stand down period for the self employed seeking to become unemployed, i.e. similar to if someone just walks out from a job?

They may well not be against self employment. They just want to limit other taxpayers support for it. In principle, I'm in favour of them doing that. But it's not applied across the board. If, for instance, someone in a 24 hour a week (at the NMW)household (so currently getting maximum benefits), but meant to be working full time under the new rules, was treated in the same way, i.e. deemed to be receiving the income for the maixumum hours they should be working, then fair enough. But there are no plans to apply the MIF to anyone but the self employed.

The vast majority of self employed people aren't going to care. They are either already earning at least the NMW in profits for the hours they are meant to be working under UC, or are ineligible to claim because of their spouse's income being too high. But to have a support period of only 6 months on NEA? That's not a long enough time to support a business that is likely to be undercapitalised and an owner who is probably inexperienced at being self employed.

tomterm8

dktreesea wrote: »

We let hundreds of thousands of people languish in unemployment year in, year out.

It's not the conservative government's plan to let that continue for long.

Bottom line, though, is that as I said earlier in the thread any implementation of UC is at least two years away, and the regulation changes you are suggesting would be further away than that if they ever happen.

At the moment NEA is on top of your tax credits, so there isn't the complete drop off in income you're suggesting.

I guess that we can only play on the playing field we have at the moment... if things change, then I will change my opinion. But I think it's highly unlikely that the changes you are suggesting would happen without an act of parliament and that would give us advanced warning.

dktreesea

Andy2013 wrote: »

Self employment is really hard , it takes a certain type of person to make it work and the early days will always be the toughest because your trying to learn how to do things , figure out why bits go wrong and was It your fault, etc.

It takes a long time to be better of in self employment rather than benefits but it does make you feel a whole lot better , its just a shame that normal everyday people don't run the government, things would be different then.

My goal when I started the business was to pay tax, it sounds crazy but it meant I was doing ok , over 10k per year profit which seemed years away at the time, next years tax return is going to be considerable and it makes it all worth it.

It's great when self employment works out for someone, replacing their lost income quickly, and for people who are inexperienced that probably involves some luck as well as hard work.

But for the vast majority of people, even people doing well, being self employed is really hard work. Ironically, even more so for micro businesses when you first start to employ people.

dktreesea

tomterm8 wrote: »

It's not the conservative government's plan to let that continue for long.

Bottom line, though, is that as I said earlier in the thread any implementation of UC is at least two years away, and the regulation changes you are suggesting would be further away than that if they ever happen.

At the moment NEA is on top of your tax credits, so there isn't the complete drop off in income you're suggesting.

I guess that we can only play on the playing field we have at the moment... if things change, then I will change my opinion. But I think it's highly unlikely that the changes you are suggesting would happen without an act of parliament and that would give us advanced warning.

The Universal Credit Regulations 2013 are already law. So is the Welfare Reform Act 2012. For people required to work:

Minimum income floor
62.

—(1) Where, in any assessment period, a claimant is in gainful self-employment (see regulation 64) and the claimant’s earned income in respect of that assessment period is less than the minimum income floor, the claimant is to be treated as having earned income equal to the minimum income floor.


The only exception stated is where the business is in a start up phase, defined later in the regulations as the first 12 months of the business' life.

The way I interpret this is once UC comes to your area, you start your business so get NEA. After 6 months this falls away but you still get whatever benefits you would be entitled to now for the next 6 months, then, at the end of the 12 month period, the MIF kicks in. Once that happens, there's no transitional protection.

dktreesea

tomterm8 wrote: »

It's not the conservative government's plan to let that continue for long.

So what exactly is their plan for the unemployed? I don't see how it's their choice whether these people work or not. What are they going to do? Farm them out to willing private companies like Tesco and Argos, to work for free? Do you seriously think the taxpayer supports their taxes being used to prop up the likes of Tesco and Argos?

Or how about continuing doing as they do now, pushing people off the dole queue into self employment?

The current levels of subsidies cause low pay and high rents. They hurt a lot more people than the people actually claiming those benefits. Rents are higher, and pay is lower, than it should be, right across the board.

dktreesea

Is anyone now at the point where the NEA has stopped? What's it like having to cope with the sudden drop off in income?

tomterm8

dktreesea wrote: »

The Universal Credit Regulations 2013 are already law. So is the Welfare Reform Act 2012. For people required to work:

Minimum income floor
62.

—(1) Where, in any assessment period, a claimant is in gainful self-employment (see regulation 64) and the claimant’s earned income in respect of that assessment period is less than the minimum income floor, the claimant is to be treated as having earned income equal to the minimum income floor.


The only exception stated is where the business is in a start up phase, defined later in the regulations as the first 12 months of the business' life.

The way I interpret this is once UC comes to your area, you start your business so get NEA. After 6 months this falls away but you still get whatever benefits you would be entitled to now for the next 6 months, then, at the end of the 12 month period, the MIF kicks in. Once that happens, there's no transitional protection.

For clarification, these regulations only apply where the secretary of state by statutory instrument has put them into force, and only for specific classes of people, and the pathfinder implementation explicitly excludes self employed people.

Further to that, the most recent audit of the software implementation suggested that the current state of the software implementation is awful; the software doesn't work even for the simple cases tackled for the pathfinder trial.

tomterm8

dktreesea wrote: »

So what exactly is their plan for the unemployed? I don't see how it's their choice whether these people work.

Their plan is to make it so difficult to claim JSA that people don't.

Just IMHO.