Universal Credit penalty for self-employed, says Citizens Advice

Universal Credit penalty for self-employed, says Citizens Advice
From BBC - April 12, 2018

Self-employed workers on Universal Credit could receive far less than employees earning the same amount, a charity has claimed.

Citizens Advice claimed that a bad month of self-employment income would not be rescued by the new benefit.

It suggested a self-employed worker earning 9,750 a year would be 630 worse off under Universal Credit than an employee in the same circumstances.

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


Universal credit is a new benefit for working-age people, replacing six benefits and merging them into one 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.

It was designed to make claiming benefits simpler.

However, Citizens Advice said it had unveiled a loophole that meant a self-employed claimant who earned less than the national minimum wage one month would not have the difference made up by their Universal Credit payment.

In contrast, if their monthly earnings went over the minimum wage level, their benefit payment will be reduced accordingly.


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