Universal Credit, Self Employment and the Minimum Wage

The new rules for self-employed people on Universal Credit are to set to be some of most complex ever designed and will prove devastating for the lowest earning workers.  Self-employed people could find business ideas rejected by panels of government busy-bodies or face having to cancel organised work to attend workfare, all whilst attempting to battle unprecedented levels of red tape.

Under current rules, low paid self-employed people who work 30 hours a week can claim Working Tax Credit.  This is a lower amount of benefit than Jobseekers Allowance and is removed at a lower rate when wages increase.  Housing Benefit can also still be claimed, at a reduced rate dependent on earnings.  This has meant that self employed workers can take work, or develop a business, without being forced to sign on and off unemployment benefits everytime they earn anything.  Much like Working and Child Tax Credits, which are payable to those with children working a certain number of hours a week, this ended the situation for parents and the self-employed which left some people better off on benefits than on taking up low paid work.

A removal of the 30 hour limit would have been a cheap and swift way to ensure that everyone could benefit from Tax Credits.  The payments could have functioned as a lower rate of benefits for those who are able to obtain some form of work, the stated aim of Universal Credit.  This Government have done the opposite and in April removed the right to working tax credits for parents working part time, plunging tens of thousands of families into immediate poverty.

Some have claimed that the Tax Credits system has been abused, with people working 30 hours a week on businesses or self-employment which earn very little.  This misses the point.  By and large these are people who would be paid the higher rate of Jobseekers Allowance were their Tax Credits removed.  As well as costing more, this would have meant it would be practically impossible for people to declare small amounts of income from self-employment without having benefits slashed or removed completely.

There are reports that Welfare to Work companies have been bullying people on the Work Programme to leave Jobseekers Allowance and claim Tax Credits instead.  This may account for the recent fall in unemployment, which saw a huge rise in the number of people registering as self-employed during the same period.  Welfare to Work companies can pick up large payments from the DWP for those they claim to have supported into self-employment.  Should that self-employment turn out not to be genuine, then those claimants could face not just being stripped of Tax Credits, but also forced to repay any money they have previously received under the system.

Despite this potential abuse by private sector poverty pimps, Working Tax Credits have been a cheaper and less complex way to support those in self-employment than previous schemes.  Those who have benefited are not just grasping entrepreneurs, – tradespeople, casual labourers, child minders and even artists, actors and writers are some of the sectors that depend on Tax Credits for survival.

This is all set to be brought to an end by Universal Credit, which will introduce a staggering amount of complexity into the system and will stifle the chances of both the self-employed and the entrepreneurial alike.

According to the recently published draft regulations: “claimants who declare that they have income from self-employment, or who are self-employed with no income, will be invited to a “Gateway” interview.”

This appears to be some form of Stalinist Dragon’s Den, whereby people will be forced to prove to the DWP that their business, or their trade is: “done with the intention of increasing the income received to the level we could expect the claimant to make if working full time”

Claimants will be expected to provide reams of evidence at these interviews which will no doubt be carried out by people with so much entrepreneurial know-how that they’ve ended up working in the Jobcentre.

Should the claimant pass this government test, then they will be granted a year’s start up period, during which they will be largely left alone.  After that they will be subject to the ‘Minimum Income Floor’.  This means that self-employed people will be expected to earn a certain amount a week, or lose eligibility for benefits or self-employed status.  The Government are not telling us exactly what that Minimum Income Floor will be in the consultation  documents, however it has previously been suggested that people will be expected to earn at least the minimum wage for any self-employed activity.

Under the new proposals self-employed people will be expected to work at least 18 hours a week.  It is unclear whether those in self-employment working at this level will be expected to abandon self-employment to take up full time work, or workfare, should the DWP deem it appropriate.  Those working part time are now to be forced to continually look for full time work, attend interviews at the drop of a hat and hand in their notice immediately should they be offered even a temporary full time job.

If these requirements are not inflicted on self employed workers, then for many people simply under reporting their hours will mean they are able to qualify for the full Universal Credit award.  If this all sounds confusing that’s because it is.  Once again a key piece of legislation, set to go before Parliament in Autumn, has not been thought through or adequately explained.

It is likely that the Minimum Income Floor will mean that self-employed people are expected to earn the equivalent of the minimum wage for 35 hours a week or face a cut in benefits.  As Housing Benefits are now to be lumped in with Universal Credit, this may mean homelessness for some.

Another aspect of the new regime will punish people who invest in tools, stock or other business expenses in order to increase earnings.  Self employed people will now be required to report all income and business expenditure on a monthly basis as opposed to annually as under the present system.  Expenses will not be carried over to the next month.  This will mean if someone spends a couple of grand on stock this will only be reflected in their earnings for that month.  The new system will make it impossible for self-employed people to invest on any significant level to improve their earnings.

It will not just be businesses that have large outlays, such as small shops or tradespeople, that will be affected by the monthly reporting.  A freelance journalist who spends a month writing a piece in anticipation of it being sold will be penalised for not earning minimum wage during that period.  Self employed people will be punished for injecting both time and cash into their business.  The harder you work, the less you get.

And these are the lucky ones who have passed their DWP Dragon’s Den.

People who fail to impress the Government with their self-employment plans will still be permitted to earn money from self-employment, and will face the same monthly requirement to report any earnings.  They will also however be given a Claimant Commitment, meaning they will not be treated as self-employed.  This will mean that there will be a requirement to attend Mandatory Work Activity or attend pointless courses and workshops with Welfare to Work companies like fraud ridden A4e any time the DWP sees fit.

This will destroy people’s ability to take on small amounts of work on a casual basis.  Should someone be offered a few days work on a self-employed basis they will not be in a position to guarantee they can turn up.  They could be sent to work in a charity shop with no pay that week instead.  Far from the stated aim of making all work pay, short periods of self-employed work will be a commitment that claimants can no longer make under the new regime. The DWP will decide how you spend your time and if you fail to comply you could face sanctions for up to three years.

It is the subtle shift in the meaning of the minimum wage though which is perhaps the most revealing indicator of the direction of this toff Government.  For too long greedy employers have forced people to work on a self-employed basis to avoid having to pay employees the minimum wage.  Many cleaners, au pairs and child minders are paid less than minimum wage and registered as self-employed, as are people on building sites around the country along with people working in shady commission only sales jobs.  Whilst in some cases this is illegal, it is common practice in many sectors.

Iain Duncan Smith is attempting to usurp the minimum wage by making it not an employers responsibility to pay it, but a workers responsibility to earn it.  If someone is working on a self-employed basis on a building site for less than minimum wage, it will be the worker who is punished by the benefits system for not earning enough.

The sets the groundwork for the abolishment of the minimum wage, whilst retaining a requirement on those in receipt of vital benefits to earn it.  It is obviously wild scare-mongering to suggest that the Tories want to do away with the requirement on employers to pay the minimum wage, however there is nothing in these new regulations that would prevent that.

The proposed regulations state: “In order to meet a given work availability requirement claimants must be available to immediately take up, (or attend an interview for) work/more work/better paid work.

Were Tories to bow to pressure in their own party to scrap the minimum wage for certain groups, such as disabled people, there would be no need to amend Universal Credit legislation.  If you don’t earn minimum wage it will be your own fault, not the fault of those paying you.  For those in self-employment this is already to become a reality under the new regime.  Whether this punitive arrangement is laying the groundwork for the minimum wage to be scrapped for everybody -  whilst attempting to minimise the resulting cost of in work benefits – remains to be seen.

The draft regulation for Universal Credit have just been published and are open to consultation at: http://ssac.independent.gov.uk/consult.shtml

Universal Credit’s Attack on Householders (and who really benefits)

How Universal Credit Will Destroy Part Time Work

Universal Credit’s Attack On Volunteers

How Universal Credit Will Split Up Families

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89 responses to “Universal Credit, Self Employment and the Minimum Wage

  1. Who thought anything IDS had his grubby mitts in would be simple or, even, honest? This is simply a new, madly complex, way to screw with people’s live and reduce them to penury.

    Like much else this bunch have done, it carries more than the suggestion of insanity, both individual and collective.

  2. Say hallo to riots in the streets. Look at the Godawful mess RBS and Natwest are in today and that’s after trying to implement a new system simple by comparison with UC. This is going to be an utter disaster for the entire country. Still, to a degree it will serve them all right for standing and doing nothing while the disabled took a pasting. What made them think they weren’t going to be next?

    • Yes and I was one who did not stand still but fought like hell, sadly I was taking to a labour party that brought in those welfare reforms and still think it was needed.

    • Theres a nation of disgruntled people, low income earners being squeezed till they burst a blood vessel. Its overdue that the 1% can keep hold of the wealth. The systems broken and no band aids going to help repair it. The poor are starting the uprising. I for one WILL not commit suicide, i will prefer to become a terrorist to fight this insanity and take the struggle to them. Them they can incarcerate me at a cost of £2k a week. The systems insane!

  3. JustAnotherNobody

    If i wasnt petrified before of the WCA and ESA being so unfair – Now i may as well just top myself as this evil underhand govt arejust making it impossible to actually exist let alone live (of course they are allowed to live as they inherited it in the main and didnt earn a penny of it properly – Just by tricking the system)

    Totally petrified

    • Good Samaritan

      Don’t do it, buddy. Don’t give these evil cunts what they want!

    • Bit of a waste topping yourself. Kill a Tory instead :-)

    • That’s exactly how I feel, JustAnotherNobody. I’m currently on income support based on ill health, but am just so distressed by the whole upcoming move to ESA and WCA, that I’ve been desperately and frantically looking for ways that I might be able to earn a possible living (from home, as I can’t go out regularly) in order to work towards sustaining myself in the long run.

      But if my initial earnings happen to be less than minimum wage while I build up experience and, therefore, my earning potential, it seems I will not even be eligible for this benefit, or I will receive so little financial help that I’ll essentially be living in poverty.

      Just to reiterate, I hardly leave the house, so my ONLY chance to earn a living is from home. If I cannot do that, the only other option is ESA, which will likely mean a constant stream of WCAs (with possible refusals and appeals), work focused interviews (if placed in the WRAG group) for jobs I can ever take. I do not want to end up on the ESA merry go round, but am not eligible for JSA (due to be unable to go out to work), and thought that WTC would have been a solution to my problems. But no, the government would rather hinder any efforts I try to make to help my own situation.

      I just feel there are constant obstacles put in my way, not to mention that being under 35, I had my housing benefit almost cut in half and had to apply for discretionary housing payment. This was granted this time around; however, there is no guarantee it will be granted again.

      I just feel the future is so uncertain, I even have a suicide method in place. How crazy is that? Or maybe it’s not so crazy, after all…

      • Don’t plan a suicide, plan the murder of any one of the parties you blame for this mess (even if you have to invite the victim to your house to do it)!

  4. It looks like the Government is determined to destroy this country. Fair enough going after the lazy work-shy toads who are healthy, have no qualifications, have no intention of getting qualifications and will never intend to work. But why go after people who want to work so much that they get up and do it on their own without waiting for the fickle big corporation to employ them? It is ridiculous in the extreme. We are having to sell our house, just so that we can start a business (which wouldn’t happen under this scheme), pay my university fees for my Masters (which, by the way, there is absolutely NO FINANCIAL support for, unlike those doing a Bachelor’s, which would be joke if it didn’t ruin the carriers of young people before they have a chance to start it, something which I am sadly, all too familiar with) and to pay of the care fees for an elderly lady who is currently being exploited for all her life’s work because she can no longer look after herself by one of those “oh so caring” Care Home companies….. You would have thought that in a time of uncertainty when it comes to money, that the Government would be encouraging the self-employed because it is the only way that they can look after themselves, and get the country out of debt because it generates some degree of independent income, but sadly, not. You have to ask yourself just what the Government it trying to achieve by crippling its citizens.

    • Power, Emily, power over them. By making us weaker, they make themselves stronger by comparison. Also while we’re all occupied with keeping our heads above water we can’t be given over to philospohical musings on subjects like, how is it that banks make up money when they pretend to lend it? That realisation is slowly spreading among the population – welcome to the information age – wait till that one really hits the fan. We’ll see some rage then… they’ve got nothing propping them up except privilege, this sorry bunch, and that privilege is based on banking fraud, and that fraud is getting closer and closer to being exposed. That’s their real fear and that’s why they’re trying so hard to mess us all up. We scare them.

      • The scandal of this banking fraud has to be publicized at every opportunity – Unbelievably some people still think that when you put money in the bank it is held in a vault and it can be given back to you at any time – and most people did not know that when a bank lends you money it doesn’t have the money ready it just makes it up. So by paying back the loan with interest you create the money for them and the profit, Lastly the bankers were allowed to gamble with money they did not have and then get the taxpayer to pay the bill when they lost – lets all get that message
        out there.

        • Exactly. And let it be known that the banks, despite the singular advantage they had over the rest of us of being able to create money, got themselves into so much debt they threatened the economy itself. This lead to a craven government (Labour, I might add) transferring that debt to the shoulders of the taxpayers and allowing the bankers to carry on as normal. We are now seeing our services reduced everywhere in a vain attempt to pay back the bankers’ debts. It’s futile, as the debts are so big they are quite simply beyond paying. But while our quality of life is being eroded by degrees, the banks carry on as before. That’s the situation that needs to be addressed and the western world won’t be put to rights till it is.

      • I totally agree with you Kay, and once it’s exposed its going to really hit the fan, but if that’s what is needed to get us out of this mess.Trouble is, the people all need to come together but there are too many goody two shoes out there. I really don’t think its going to be too long before its all exposed though, from what I hear, the experts are giving it only a couple of years.

    • Emily, you sound like a right middle-class toff. Now, fuck off!

    • Ah yes Tory then.

  5. I do like the ide of universell credit, making work pay etc but the way they have gone about and done it is wrong. I belive benefit and tax system should be one of the same. I would sugjest a national income system(benefit) to replace Jsa and working tax credit. Where you get £10,000 a year if you have £0 income and where the national income is redused with £1,000 for every £2,000 you earn. And where you pay tax only on income above £10,000 a year at a flat tax no dediction. Where they equelise income so that the income tax is the same for divident and regualr wage.
    This would mean a part time worker or self employeed earning £7,000 a year would recive £6,500 from there national income and pay tax on £3,500 of there income. This would give pepole a incentive to work and put money in to the economy. It would allso help reduce goverment paperwork and busy bodys.

  6. By the way… “By and large these are people who would be paid the higher rate of Jobseekers Allowance were their Tax Credits removed” are there two levels of JSA now? I thought JSA was JSA was JSA.

  7. Michael Robert Smith

    Your a welcome gust of wind in the face of tory bullshit man.

  8. Pingback: Universal Credit, Self Employment and the Minimum Wage | WeAreSpartacus News | Scoop.it

  9. So is the government actually planning anything to help self employed people boost their earnings up to required and/or better levels, or is their solution just to shove people into pointless workshops and proper jobs? not thinking about the fact that some people work damn hard but choose to and want to work self employed (parents, people with health problems etc) and that you can’t just apportion blame for low earnings.

    I’ve never claimed any benefits, partly because of confusion over the system, and partly because I don’t ‘fit’ into any category. I am not ready and willing and able to work 40 hours a week (requirement for JSA application) in a proper job, nor am I likely to be eligble for ESA. I suffer from anxiety and agorophobia, I am out and about, but it has effected by life in a lot of ways and the demands of going into a proper job each day, working in an office and shop environment a no-go. That said as a freelancer and in my spare time betterware distributor I work very hard. My earnings aren’t great, which I won’t go into, but work for me at the moment.

    Maybe they need to think about people’s individual situations a lot more. If someone benefits a lot from self employment, and freelancing has helped me in many ways, but could do with some specific guidance, networking, opportunities etc……why not help them…..why not for example realise that there is a lot to farm out to people working from home, who are not milking benefits, that would save money for them, and up our earnings…

  10. Pingback: How Universal Credit Will Create A Latchkey Generation of Hungry Children | the void

  11. I’m self employed and trying to build up a business while getting by on Tax Credits. Nothing about this half-assed scheme (no doubt run by some private company whose director went to the same fetish club as IDS) looks good to me. Nothing about this scheme is going to help me be self sufficient, just waste my time looking for non-existent jobs that will detract from my actual work. It’s clear these clowns no nothing of the real world and are going out their way to screw everyone over. Why are we standing for this instead of dragging them out into the street and pelting them with rotten vegetables.

  12. Assuming there’s some thread of logic running through this legislation rather than crass incompetence and complete absence of joined-up thinking, it looks to me like they’re trying to force everyone into paid employment (= corporate slavery). George Orwell must be turning in his grave …

  13. TroubleCameCalling

    It was like living under a government of occupation under New Labour. But this lot feel like your actual fascist junta.

    THe worst of it is, this all seems to be happening in a void – a very large one admittedly – where not a scream reaches the outside world.

    God curse. you BBC. And you ATOS, And you A4E.

  14. Well, this could see the death of many of this country’s farmers! If you’re a self-employed tenant farmer you would have previously received around £600 per month from working tax credit if your business was making a loss. Now they’ll have to forego any benefits and try to borrow from the bank to keep their business afloat. If this becomes too much for some then their businesses will fail and they’ll be homeless as well as unemployed (and a lot will struggle to find ‘real work’ if they’ve never got any qualifications). Most farmers will show a loss for most months of the year as they’re spending on seed, fertiliser and fuel for planting in the autumn and spring and then get subsidy income in May (if they’re luck) and income from the harvest in the autumn. A monthly reporting system will make their business look very dodgy for most months.

  15. Yes Ruralgeek – thus increasing the use of imports, another way to make the economy (and ecology) worse. It’s going to effect a lot of people. I work in the creative industries, also an area where long development times with low income can be quite commonplace and yet are essential not only for smaller more artistic endeavours but also in the development of new technologies and techniques which serve to benefit the industry as a whole. This is actually a very important time to find ways to fuel technological and creative innovation – particularly considering we are no longer a manufacturing country. It’s not just about this scheme here either, but also much wider implications of austerity measures including the fairly rapid withdrawal of support and education for the under 25s. Britain has had a key place in the creative industries, for instance audio and visual post-production, gaming and other software development. By strangling creativity and development at its root, they are rapidly ushering in the death of yet another key export of the UK. It makes no sense at all.

  16. In a wider sense, this is about a lot more than the individual. It is about more than increasing the wealth divide. This is about social engineering to create the conditions in which the increasingly desperate acts of the common person can be used as the reasoning to usher in an unelected quasi government of Europe and soon after, the world. ‘You need the new world order. You need us to protect you from yourselves.’

  17. Great post. Only point I’d add (tho slightly off topic for the self-employed without children) is that the number of hours required for Child Tax Credit has gone up from this April, from 16 to 24 hours, especially a problem for part-time employees on minimum hourly wage in businesses which aren’t fiddling tax or National Insurance. Either the business risks prosecution by reducing hourly pay to allow the employee to book 30 hours on the same pay, reduce someone else’s hours to ‘allow’ the CTC employee to actually work longer hours, or the employee looses their right to Tax Credits, even though they’re not earning any more money. As I understand it businesses with employees claiming Universal Credit will also be responsible for reporting monthly wage statements.

    Universal Credit will not only not be more ‘universal’, it will not be paid in credit, but after each month’s budget/wage bill is submitted.

    I’ll be interested to see how the DWP (or HMRC, or whatever the hell new acronym they’ll come up with for the managing authority) is going to cope with every self-employed person reporting their income and expenditure every month and having to adjust benefit accordingly. I predict a systems failure on at least the scale of the old Child Support Agency. So in the end it may never happen.

    Don’t know why, in the wake of all these bank bailouts, scams and speculative failures people aren’t demanding a minimum basic income, whether along the lines as proposed by lexander above, or with the tax element transferred away from earned income to land rents/values and speculation. The current bailout expenditure alone – £124bil (that we know about) – alone could have netted every person in the UK £2000.

    I’m really tired of trying to defend whatever system exists – usually bad and demeaning enough already, against one that is even worse. There’s been over 30 years of this, and it’s time to propose something new and fair for everyone. And simple to claim. And dignified.

    I’m also tired of people carrying on over the ‘right’ to jobs, or even wages, which simply do not, and maybe even cannot, exist. If the banks can tie up the world’s resources with $700 tril fictitious derivatives we have the right to demand our $100k share to each person. Because we exist, and didn’t ask to be born. I don’t care if anyone ‘works’ for it, too many people are already doing too much for nothing. I bet a lot of creativity and problem-solving would result, as well as a lot of partying.

    Otherwise we’re just playing the same old S&M game over the work ‘ethic’, with people’s fear encouraging the government, and its minions, to hit us even harder.

  18. Pingback: Cash In Hand Payments Will Soar Under Universal Credit | the void

  19. Pingback: Million jobless may face six months unpaid work or have benefits stopped | Society | guardian.co.uk | jan's space

  20. https://www.facebook.com/groups/antibedroomtax/

    Here to fight these unjust taxes please join

  21. Hello would you mind stating which blog platform you’re using? I’m going to
    start my own blog in the near future but I’m having a difficult time deciding between BlogEngine/Wordpress/B2evolution and Drupal. The reason I ask is because your design and style seems different then most blogs and I’m looking for something completely unique.
    P.S Apologies for getting off-topic but I had to ask!

  22. As an artist maker I work hard to survive anyway, but am passionate to work with my skills to improve the lives of others in The Rhonnda Valley, where there is poverty anyway. I try to help new,emerging artists and makers through showcasing work, running events and working with agencies, unpaid. On paper I look poor but my life is rich but looks like I would have to job hunt, how sad, no vision.

    • Melissa – I completely agree. I do a lot of free or heavily discounted work for my local arts and music community in addition to the regular self-employed work that I get. There is no government category to consider people who actually provide something of real value to the CULTURE of the community, to benefit and enrich peoples lives on a day to day basis. One example of this short sightedness you speak about is the recent closing ceremony for the Paralympic Games. Brushing aside that it was actually an overblown Coldplay concert for a moment – all the weird and wonderful vehicles, mechanical dinosaurs etc that were used in the ‘festival of fire’ section were commissioned from ‘Mutoid Waste’. At no point was “their” involvement mentioned… although there were plenty of references to the act Coldplay.
      Mutoid Waste were born out of the free party / squatting scenes. That art that was used to show off how culturally diverse and interesting the country is, was made by people who were able to flourish their art by living and working in disused spaces (this ceremony happens just days after a major clampdown on squatting laws and it won’t be the last). While I was pleased for them that they had the opportunity to showcase their work to such a huge audience, it was also tinged with sadness for me – thinking essentially that while the establishment are happy to wear this work like a badge of honour, they are crushing the roots of the scene that made it at the exact same time. Like you say, “no vision.” :(

  23. Pingback: Universal Credit – The Great Unravelling Begins | the void

  24. self employed on low income will just not claim utc,they will be forced to survive on way below minimum wage,as monthley reporting is just not feesable in all but the very simplest of buisinesses,ie something like selling makeup or betterware type of buisiness.anyone plowing money into there buisiness to improve it ,will find the new system inpossible,just the paperwork would be overwhelming,

  25. As a disabled person who went self employed last year I’ve been shouting about universal credit for months it’s a disaster and something my business wont survive its such a kick in the nuts for anyone struggling to stay off ESA… Words cant describe how much I hate these b@%$£@£s. Every time I think of a way to get by, they come along and pull the rug, begging to wonder just what the hell the point is… Grrr At least this one is aimed at a vast swath of the population and not just us, maybe they will wake the F*^K up now!
    Thanks for highlighting this… sharing everywhere… Dxxx

  26. Hi! I am on part time job and plus want to make some extra money as self-employed. I do not want any benefits, I’m ok with less money and don’t want full time job as I hate jobs currently available and slowly want to build my own business. Will this Universal credit affect me? Or does it affect only people who claim benefits?

  27. i feel sorry for people that have lost their council jobs and have tried to start their own self employment now they are going to be shafted again. I cant see why over seas aid cant be reduced and money used to help people in this country . overseas aid is set to rise to 12 billion pounds by 2015 every year meanwhile food banks are opening everywhere crazy….max

    • I’m one of the people that lost my council job (of over 20 years.) when the Torys got in, back in 2010. Talk about a culture shock! I’d never been out of work before so was totaly unprepared for what happened next. The amount I’d paid in NI is quite staggering but it made no difference. Useless grasping workfare providers, Zero useful training, belittled & patronised & constantly threatened with sanctions, loss of home etc. As far as I’m concerned the government has taken my tax & NI contributions under false pretences which is tantamount to outright theft. I’ve been struggleing to get enough cash together to set up a little self employed business, now they are going to ruin that too. My partner is disabled & more or less house since we could’nt aford to keep the car anymore. Currently we have subsist on the pittance she gets on IB + the £20 or so a week that the dwp gives me. After working my guts out for the last 35+ years old it should’nt be like this, This universal credit will finish us off. These people have no idea, they have doomed the country for their own selfish benefit.

  28. I am truly worried…. We are about to slip in to anarchy and a street corner near you will look like scenes we have seen from Greece and Spain. Those that are able to budget will be randomly attacked in the street ,looting and violence will become the norm…. It’s a mess.

  29. I’m self-employed, but i don’t earn the minimum wage. with the current tax credits I can just get by, but this new scheme is just going to force me onto the dole and claiming 3-4 times as much in benefits. It’s madness. I thought by working I was doing something worthwhile, even if I needed a little help, but these bastards are determined to pull the rug from under the feet of people like me.

    Like JustAnotherNobody, I am terrified of the future and have also contemplated topping myself.

  30. I have been told that if a self-employed person were to declare that they earned the minimum wage for 24 hours a week, then they would qualify for Universal credits and not have to job hunt as well. Is this true? If this is the case then perhaps the requirement is more to do with the government being able to claim that more people are working and getting the minimum wage than before?

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  37. This is such a crock of shit. Anyone who has freelance or been self employed spends most of their time chasing after people who owe them money. I spend over a year going to small claims court trying desparately to get a company to pay me for work I did them . I only got part payment in the end. Self employment is no guarantuee of income.

  38. OMG!!! What a nightmare.

    I get paid irregularly in lumps, which with the help of WTC just about see me through until the next lump comes in. This is going to be a disaster for anyone who takes on small contracts and then scrabbles around for the next one.

    Asking people to pay me monthly not only complicates my tax return, but also makes paying me more complicated for them – consequently they are more likely to award a contract to someone who doesn’t have this requirement.

    I can see this turning into a tax mess – with people filing fraudulent reports of income with the job centre, then consequently fraudulent reports with HMRC.

    This *is* going to turn into Greece with the g;ment trying to catch little people for non-existant taxes all over the place while the British Leguarde equivalents and their corporate cousins swan off into the sunset.

  39. Pingback: The state of self-employment « Jules Birch

  40. Mhairi, I think you have hit the nail on the head.

    The whole approach seems to be geared towards stopping fraud, rather than helping small businesses.

    Instead of letting people earn and get by, as is often the case with self-employed people, they have this silly notion that all self-employed people have a steady income and those that do not must be “working the system”.

    They are using a sledgehammer to break small businesses, many of whom save the state a great deal of money in Jobseekers allowance, through just getting by in tough times.

    Universal credits approach to self-employment will cost the Tory’s more than they could know.

  41. UK subjects are now under a tory occupation and we’ll all roll over for our bellies to be tickled. Now the French…

  42. This is devastating. Deliberate poverty being inflicted on the vulnerable and those who are trying hardest to ‘make a go of it’. It disgusts me. There are human rights issues here. Are we just going to roll over and take it? How many people will trust the government’s “new world order” after what they are doing to us?
    Best case scenario = thriving black market, lots of bartering. People will be forced to adapt. Many are going to crumble under the pressure of this awful ‘joke’ of a system but some will excel in ingenious ways, showing the way for others… eventually leading to more personal independence. It’s time to fend for ourselves, people.

  43. Reblogged this on A Life Most Ordinary and commented:
    This is well worth a read if, like me you are self employed. Our lives, if we need any help from the benefit system, are likely to become a lot more difficult with the introduction of Universal Credit.

  44. For years the Job Centres were encouraging people to go self-employed and claim Working Tax Credits. They glossed over the Inland Revenue rules regarding what constituted working hours and affectively encouraged people to commit fraud with the aim of reducing the unemployment figures. All that is different now is we have Workfare private companies encouraging people to commit the same fraud. Pretend you’re working the 30 hours needed to qualify for Working Tax Credits and we will get lots of lovely commission for getting you off the dole. And the Government can pat itself on the back and tell us all that employment is up and unemployment is down.

  45. Pingback: The transition towards a low-trust society | The Yorkshire Ranter

  46. What a load of rubbish being touted in the comments (plus some in the article). The benefits culture has grown in size over the years with the effect that benefits are seen as a right. Sure, I was out of work for a couple of years but that didn’t stop me getting a job or retaining my dignity. It’s always fashionable to knock the Conservatives and the banking sector but remember, it was Labour that brought the country to its knees through ill advised and rushed decisions. IDS is concerned with making it better for people to work than to be on benefits; what’s wrong with that?

    I fully expect to be flamed by viewers of this post but, hey, do I care?

  47. No need for “flames”, just, yet gain, patiently explaining the facts to someone who has not thought them through.

    Benefits are a right.

    Most who claim have worked and paid N.I., income tax and VAT, often for decades. We pay in when we can and draw out when we need. That is the system. When times are hard, like now, more will need to draw out.

    IDS’s basic idea of consolidating benefits and making sure that working means you have more take home pay, is a good one. What is wrong is the implementation of those ideas.

    Firstly he argued, very strongly for cutting benefits, this makes it easier for him as it gives him a lower starting point, especially when he is working along with the already inadequate minimum wage. But it makes things harder for those who claim.

    Secondly, along with the rest of the government he is intent on punishing the poor for being poor. He really believes that unemployment and low pay is only a matter of motivation and little to do with the availability of work or personal circumstances.

    Third and finally, because the government is paying private firms to get people off JSA this has resulted in large numbers of the unemployed being forced to become “self-employed” and declare no profits, thus having to live off tax credits. Another con, by the government, massaging the unemployment figures by a huge amount.

    Now IDS has decided that he will “weed out” those non-working “self-employed” by making all self-employed claimants jump through a nightmare maze of hoops.

    This, of course, will mean a rise in unemployment again, which is part, along with other concerns, of what is making his colleagues so nervous.

  48. Labour did not bring the country to it’s knees. You read, and believe, too much of what the rightwing press say.

    I am not a massive fan of Labour, but let’s get the facts straight.

    Brown cut the level of borrowing he inherited from Major, including cutting the “structural deficit”. His borrowing was no greater in relation to GDP than Thatchers, or any of our international peers at the time.

    What Labour should have done, was bring in tighter regulation of the financial sector, because -yes it was their fault. They took big risks, with our money and lost their bets, big time. The conservatives try to sell themselves as economically competent, but just weeks before the credit crunch our great leader -Dave made a speech in the commons condemning Brown for “too much regulation strangling our financial sector”.

    Very many leading economists, including four noble laureates, are aghast at Osbornes strategy; http://falseeconomy.org.uk/cure/what-do-the-experts-say

    But he just keeps his head in the sand and ploughs on.

    I would advise you to read more widely and not just the propaganda sheets of the vested interests.

  49. Pingback: Universal Credit Worries

  50. Pingback: Will anyone want to talk welfare in 2015? | A Thousand Cuts

  51. Pingback: Reposts, and changing my style | a Path Through the Valley

  52. Pingback: Universal Credit, Self Employment and the Minimum Wage | The Thurrock Heckler

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  57. The level of incompetence at the Job Centre is unbelievable, why they include the “plus” in their name is beyond explanation. Bogged down in bureaucracy and moronic rules that have no bearing on the real world. I was considering going self employed because I could get some regular work but it’s nowhere near the minimum wage. My only option now is to not take the work and continue signing on, which just wastes more of the taxpayers money. How on earth the government could think that forcing people to stop working, no matter how little, is a good idea is mind-boggling. As the original poster said, the fact that the retards at the JC are in charge of this debacle of a system is going to be a disaster from the start to the finish, of that there is no doubt. They NEVER take individual considerations into account when reciting from their many rule books, so how the hell can any self employed person expect to plead their case, utterly farcical. I truly hope this government gets kicked the hell out at the next election because making an already moronic benefit system even more difficult has to be the stupidest, risible things since the Thatcher years. Something for nothing is what they keep talking about getting rid of, yet they are forcing people to sign on rather than be self employed, wtf is wrong with these morons.

  58. A real kick in the gonads for entrepreneurs (like myself), and totally inflexible.

    Like others have mentioned, I’m actually saving tax payers’ money by NOT signing on the dole!

    Stay alert, and do what you can to survive!

  59. Reblogged this on Bubbagumbo’s Weblog.

  60. a concerned citizen too

    This is a great blog, wonder when will be the end…I say if we don’t unite (the people), we will be conquered for sure.

  61. magnificent submit, very informative. I ponder why the other specialists of this sector don’t realize this.
    You must proceed your writing. I’m confident, you’ve a huge readers’ base already!

  62. People were surviving in their owm small niche ways wih self-employment as one does in life. Myself, before I signed on JSA I was trickling by with a very seasonal type self-employment and relied on WTC. I was poor but scraped by with the ambition that one day I would grow my business putting in most hours developing/aministering it – hence unpaid. I had independence which was great. Now this minimum earnings threshold which disregards actual work you might put in to build the business prevents me from being self-employed anymore because I know I cannot gaurantee 30 hours at minimum wage – at least to begin with! They (the Conservatives) are supposed to be about entrepreneurialism yet seem to want to drive everyone onto JSA then use their new armoury of tricks to sanction them off it and leave them to their own devices – starve if necessary what do they care they’ll be ok with that silverspoon since birth. They don’t care! I’ve read this is happening in America too; the poor are just being abandoned. Capitalism at its most evil has come home to roost. We are now approaching the end game with the exponential rate of wealth shift leading to an inevitable greater and greater redundant poor populace. Their solution -kill them off. Not spoke but actions speak. The obvious is there before us care we take to open our eyes. The anti-christ has arrived back on earth in some form and it feeds off this capitalist system.

  63. Pingback: sidewalk social scientist don’t get no satisfaction.. | The Yorkshire Ranter

  64. Pingback: Self-employed – the nouveau pauvre | Flip Chart Fairy Tales

  65. Pingback: Why the self-employed need to wake up to the threat posed by Universal Credit : RSA blogs

  66. Pingback: Why the self-employed need to wake up to the threat posed by Universal Credit | glynismillward189

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