Self Employed Minimum Income Floor - Universal Credit

EnnisR

Hi all, just looking for a bit of advice on the migration to Universal credit from legacy benefits.

I am self employed, have been for 25 years however in the last 10 years I have struggled with my health.  Now I am questioning why I have to earn the same minimum income as an employed person that receives 28 days paid holiday a year, a period during which they do not work. When I take any holiday I do not get paid and feel this is a real and unfair disparity to an employed person. The same applies to employees that get paid sick pay, if I don't work, I don't get paid!!  How is this fair and can it be challenged does anyone know?

Thanks in advance.

tacpot12

Parliament gave the decision-making authority for how Universal Credit would work to the Secretary of State for Work and Pensions, and the Secretary of State in 2013, Iain Duncan Smith (a Conservative), decided that this would be the rule. A new Secretary of State for Work and Pensions could change the rules, but it's unlikely to be a priority for the Labour government.

You can make a legal challenge, at great expense to yourself, but it will fail unless you or your lawyers can find a legal principle enshrined in UK law that the Secrety of State's decision is at odds with. If you are expecting to find a law that says that benefit regulations have to reward, incentivise or at least not penalise initiative and entrepreneurship, I don't think you will.

If you think the grass is really greener as an employee, you are welcome to get a job at any time.

LinLui

EnnisR said:

Hi all, just looking for a bit of advice on the migration to Universal credit from legacy benefits.

I am self employed, have been for 25 years however in the last 10 years I have struggled with my health.  Now I am questioning why I have to earn the same minimum income as an employed person that receives 28 days paid holiday a year, a period during which they do not work. When I take any holiday I do not get paid and feel this is a real and unfair disparity to an employed person. The same applies to employees that get paid sick pay, if I don't work, I don't get paid!!  How is this fair and can it be challenged does anyone know?

Thanks in advance.

You could apply for jobs and become an employee? If you are not, as a self-employed persaon, allowing for holidays/sickness etc, then your self-employment really hasn't been paying off and you would be better off with a job. The fact you don't get "paid holiday" etc is down to your choices, not those of the DWP or anyone else. As a disabled person who suffers badly with my health, and still works (as an employee) full time, is there some reason why you think that the rest of us should pay for your choices? If you shifted into regular employment then you would get paid holiday, at least some sick pay, and might be able to progress to a point where you didn't need benefits at all. That would be much better for you. 10 years (at least) is a long time to have not realised you may well be better off as an employee and done something about it. Equality means levelling the playing field so that we all have the same chances. Not being treated better than others. You have the same chances as anyone else, and still do. 

Oh, and I will be retiring soon and will be doing some part-time work, self-employed. I quoted my rate to allow for the fact that I don't get paid holiday etc. That is the norm.

I firmly believe in benefits to support those who have no choice but to depend on them, but they should not (in my opinion) be a lifestyle choice. Working people pay for those benefits - the same working people who get paid holidays etc, but many of whom also really struggle with the cost of living etc. If your employment is not paying for what you want and need, then you need to make different choices, not expect better treatment because of those choices. 

Marcon

EnnisR said:

Hi all, just looking for a bit of advice on the migration to Universal credit from legacy benefits.

I am self employed, have been for 25 years however in the last 10 years I have struggled with my health.  Now I am questioning why I have to earn the same minimum income as an employed person that receives 28 days paid holiday a year, a period during which they do not work. When I take any holiday I do not get paid and feel this is a real and unfair disparity to an employed person. The same applies to employees that get paid sick pay, if I don't work, I don't get paid!!  How is this fair and can it be challenged does anyone know?

Thanks in advance.

You don't have to, but if you earn less than the floor, your UC payment is treated as if you are earning an amount equal to the floor. That stops people claiming to be self employed (even if they can 'prove' they are gainfully self employed), doing next to nothing, and getting the same rate of UC as those working hard to earn the required minimum. 

If you're self employed, your charging rates need to allow for holidays etc. If you can't find clients willing to pay those rates, then maybe self employment isn't actually a viable option for you.

If you aren't able to earn as much as the floor, then probably getting a job, as DWP suggests, is the right course of action, rather than expecting the taxpayer to cough up.

EnnisR

Hi all

Thank you for your responses, all gratefully received

I have always worked full time since I was 17 (now 56) as an employed person in addition to being self employed but since the birth of my daughter my health has been awful, multiple diagnoses that now turn out to all be symptoms of a wheat intolerance, not coeliac so no help with food costs!!

  My last employed position left me with PTSD for which I am still receiving treatment. So my brain fog (excluding physical symptoms) means I work a lot more hours than I can necessarily invoice clients for. I applied for PIP, despite having the points I was rejected - the process was very difficult.  I hate having to be on any benefits but I cannot simply cannot reach the £42k need for me to stand still off benefits. I also cannot stand the thought of getting an employed position and letting an employer down due to my health or worse still getting fired for it.

So it feels like whichever direction I go to cut costs or improve my income I end up worse off.  How are all these people that don't work at all receiving so much financial assistance and yet the ones that have paid into the system for years try and keep working end up worse off. 

Adding the same rules for the employed and self employed when the circumstances are not comparable seems wholly unfair. The government may as well have said 'we don't want anyone being self-employed in the UK so if you want any help you will be penalised, go get an employed position'    I don't feel anyone who is prepared to get of their !!!!!! and work should be penalised because of their employment status.  Sad fact is I am struggling to cover basic living costs let alone be in a position to start legal proceedings to get this unfair rule overturned

EnnisR

I should add, I only had to go onto benefits after separating from a 30 year relationship (unmarried and therefore no financial settlement received).  I am not a 2nd, 3rd, 4th generation benefit claimer

LinLui

Hmm. You are not being penalised. You are being treated exactly like anyone else. And you need £42k to cover basic living costs? 

You are not required to charge a reasonable sum to support your expenses. You may charge what you want. But as @Marcon says,  if that is your choice then you can't expect people who earn £thousands less than £42k to support your choice. 

I have worked since I was 14, I will be 67 in two months time,  and I have never claimed benefits until I had to claim PIP. I'm sorry you've had a hard time, but you aren't the only one. So have lots of people. Lots of people have poor health and traumatic events. And you are expecting many of them to subsidise your position. You actually want to penalise them! And then go out of your way to judge others who might be "2nd, 3rd, 4th generation benefit claimers". What makes you better than them? You don't know them or their circumstances. You don't know what traumas or health issues contribute to their circumstances. Maybe they have their own stories of hardship. You aren't better than them. 

The rule isn't unfair. It is entirely reasonable to expect people to generate enough income to at least equal what others must earn to support themselves (and also to frequently support those who don't support themselves). If you want an income of £42,000 then you need to start earning it,  not expecting to be given it. 

On a separate note,  if you genuinely think you should get PIP there are many organisations that will help you apply. But you won't get £42,000!

Marcon

EnnisR said:

Hi all

Thank you for your responses, all gratefully received

I have always worked full time since I was 17 (now 56) as an employed person in addition to being self employed but since the birth of my daughter my health has been awful, multiple diagnoses that now turn out to all be symptoms of a wheat intolerance, not coeliac so no help with food costs!!

  My last employed position left me with PTSD for which I am still receiving treatment. So my brain fog (excluding physical symptoms) means I work a lot more hours than I can necessarily invoice clients for. I applied for PIP, despite having the points I was rejected - the process was very difficult.  I hate having to be on any benefits but I cannot simply cannot reach the £42k need for me to stand still off benefits. I also cannot stand the thought of getting an employed position and letting an employer down due to my health or worse still getting fired for it.

So it feels like whichever direction I go to cut costs or improve my income I end up worse off.  How are all these people that don't work at all receiving so much financial assistance and yet the ones that have paid into the system for years try and keep working end up worse off. 

Adding the same rules for the employed and self employed when the circumstances are not comparable seems wholly unfair. The government may as well have said 'we don't want anyone being self-employed in the UK so if you want any help you will be penalised, go get an employed position'    I don't feel anyone who is prepared to get of their !!!!!! and work should be penalised because of their employment status.  Sad fact is I am struggling to cover basic living costs let alone be in a position to start legal proceedings to get this unfair rule overturned

Did you make a claim against your last employer for the lasting damage you appear to have suffered as a result of your employment with them?

Yes, the PIP process is difficult, but again, the intention is to dissuade those who should not be entitled to it, not bar those who really do have a legitimate claim. Have you appealed? https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/pip/appeals/mandatory-reconsideration-pip/

It isn't an unfair rule. The intention, as I've pointed out above, is to stop people claiming they are self-employed, doing next to nothing and claiming more UC than would otherwise be their entitlement. 

Have you looked into the possibility of a short-term temporary job to see how that would go? That way if things don't work out, you've only got a very limited time to 'survive' it, especially if it's only for a couple of weeks. Dipping your toe in the water might be the only way to find out if the temperature is tolerable.

EnnisR said:

I should add, I only had to go onto benefits after separating from a 30 year relationship (unmarried and therefore no financial settlement received).  I am not a 2nd, 3rd, 4th generation benefit claimer

I'm afraid people have to live with the consequences of their own actions/choices. Are you getting financial support for your daughter?

theoretica

With self employment, you don't need to make sufficient profit for your employer to pay both your wage and employer's NI, pension contributions.  So as I see it there is a way that the self employed has lower requirements, but it is a bit hidden.  Some one employed isn't being paid for doing nothing when they are on holiday, they are being paid for the work they did on other days but not exactly when they worked.