Universal Credit has always been controversial, so the UK government’s decision to delay its rollout is welcome by many, including freelancer group IPSE. The group also urged the government to reform parts of the policy that penalise the self-employed.
The problem is that the Universal Credit payment will vary each month depending on how much an individual earns and other circumstances. It is impossible for individuals to calculate for themselves how much this payment will be. The Department for Work and Pensions (DWP) will work out the payment by comparing how much an individual should have earned to how much money that he or she actually made.
Jordan Marshall of IPSE said: “Self-employed people can be thousands of pounds worse off each year under Universal Credit compared to full-time employees making a similar amount. This is because Universal Credit calculations don’t account for monthly fluctuations in self-employed income. IPSE is calling on the government to use the delay in the rollout to fix these flaws, which punish the self-employed. Unless the system is reformed, Universal Credit will continue to sap the incentive to run your own self-employed business.”
Work and Pensions Secretary Amber Rudd MP announced the delay recently, which means that the remaining 3 million welfare claimants will not move to Universal Credit. Instead. the MP’s department will seek to get approval for a pilot scheme that will move just 10,000 claimants to Universal Credit in July.
If the pilot scheme is a success, then all claimants will move to the all-encompassing benefit.