self employed hours WTC

BigAunty

aliwali wrote: »

Sorry to hijack thread. I must be living in a cupboard because I haven't even heard of Universal Credit! Does this mean then that as a childminder earning £3 an hour, I would earn for a 30 hour week say £90 per week, but under UC I would be assumed to be earning £212.80? If that is indeed correct how is that either fair or accurate.

Cue winding up my business if that is going to be the case.

I get the impression that the govt find the hours thresholds for the self-employed a very arbitrary device.

Critics of WTC argue that it is counterproductive and the opposite of how a good business should work. Since benefits are paid to those with low business income there's not necessarily the motivation for them to become self-sufficient - extra profit simply means perhaps more work with less benefits paid. The taxpayer ends up subsidising hobby businesses and micro businesses that can never financially sustain the household)

There is probably much more specific information on UC and the self-employed but here is the original proposal paper which outlines how it will work for the SE.

"Some self-employed people under Tax Credits report very low levels of income. We know that in starting up a business that it can take some time before it becomes profitable. But once established we would expect to see a reasonable income from the business activity. So for Universal Credit we are considering introducing a floor of assumed income from self-employment for those registering as such. The floor will be set at the National Minimum wage for the reported hours; clearly profits above this limit may be received and reported. For those self-employed people who engage in only a few hours of activity, and do no other form of paid employment then we will expect them to engage with the conditionality requirements as set out in Chapter 4 "

http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/universal-credit/

aliwali

It's not that I don't agree with everything here, yes absolutely the government shouldn't be paying for self employed people who don't try and grow their business. My point is that childminding doesn't work like "normal" jobs in that it would need me to have 3 children for all the hours I work to earn minimum wage, you can't charge 1 person £6 odd an hour in childcare! Yes it can be done but as I have 3 or my own, including a preschooler, I can only have 2 others during 9 and 3.30 anyway so can't earn minimum wage, not without charging parents more than the average locally which they just wouldn't pay! Someone with 2 of their own preschoolers could only earn £3 possible an hour as legally they can only have 1 other during the day. It just wouldn't be worth it in my opinion.

This leads on to my second point of, if I don't have minimum wage earning potential should I just give it all up and therefore end up claiming more benefits and just stay at home with my own children.

The system as a whole may work for SE people who work in different industries but will definately not work in mine because of legal restrictions from OFSTED.

Sixer

aliwali wrote: »

It's not that I don't agree with everything here, yes absolutely the government shouldn't be paying for self employed people who don't try and grow their business. My point is that childminding doesn't work like "normal" jobs in that it would need me to have 3 children for all the hours I work to earn minimum wage, you can't charge 1 person £6 odd an hour in childcare! Yes it can be done but as I have 3 or my own, including a preschooler, I can only have 2 others during 9 and 3.30 anyway so can't earn minimum wage, not without charging parents more than the average locally which they just wouldn't pay! Someone with 2 of their own preschoolers could only earn £3 possible an hour as legally they can only have 1 other during the day. It just wouldn't be worth it in my opinion.

This leads on to my second point of, if I don't have minimum wage earning potential should I just give it all up and therefore end up claiming more benefits and just stay at home with my own children.

The system as a whole may work for SE people who work in different industries but will definately not work in mine because of legal restrictions from OFSTED.

UC is going to have "personalised" conditionality. So, while there will be income levels set for conditionality generally at X x NMW, conditionality interviews/meetings etc will depend on the individual claimant. I imagine that a childminder with one paid-for child and either vacancies or their own children at home won't be subject to much, if anything, in the way of conditionality, regardless of not making NMW for hours reported.

One would hope it'll be similar to the way HMRC treats childminders with special rules, for example.