Monday 25 March 2013

Self Employed and Universal Credit: Demonisation Begins

...And so it has come to pass. The DWP have published "Guidelines" - information on how the Self Employed who currently claim Working Tax Credits will be treated under Universal Credit - the shiny new 6 Benefits-In-One flagship policy of Iain Duncan-Smith.

You can find the new guidelines here: http://bit.ly/WVUNd9



The first thing I noted was how under the previous Labour government and even initially under the Coalition Government the Low Paid Self Employed or Employed worker was seen as "striving" "doing the right thing" and trying to work their way in a low paid job. However the emphasis and language has shifted dramatically! No longer is it enough to work in a low paid Self Employed capacity, a new stringent set of regulations in order to claim Universal Credit, is about to come into force in 2013, with emphasis on "sanctions" if you do not comply on time.

The Self Employed have always sent in tax returns with income made on a once yearly basis. Not under Universal Credit. Those who need to claim the Working or Child Tax Elements perhaps, or/and the Housing Benefit element or more of the 6 benefits encompassed under Universal Credit must report monthly with paperwork so income can be scrutinised closely. Appointments will be made at Job Centres/HMRC offices much the same as the unemployed currently: a Gateway Interview will be made to discuss your Self Employment and appointments made on a recurring monthly basis. For those in rural/coastal areas it is a trek to the nearest Job Centre, and your time could be better used in finding more work quite frankly,or chasing up paperwork. Failure to report on time and sanctions will be made. Failure to report within a month and Universal Credit will be terminated!



There is also a presumption that you must work a 35 hour week and make minimum wage to be "gainfully self employed" as the DWP put it. Carers who claim Carers Allowance are exempt, but others are not. Time limits will be set to bump up your hours/pay until you are "gainfully self employed" or your Self Employment will be terminated and the DWP will force you to seek paid employment - a subtle term to transfer you onto JobSeekers Allowance/Income Support until you have a paid job.



So what are the likely outcomes/consequences? I can see many women in particular being disproportionately hit. I for example, am an Avon rep. I get commission on my sales once every 3 weeks. To get £500 of sales I receive £80-£100 of commission earnt- nowhere near minimum wage. There are many women in Betterware and Kleeneze reps jobs who fit their work around caring for young children etc but who desparately want  to retain a small degree of independence, and feel valued in the work they do. There are those who are writers, sculptors or seasonal workers like Gardeners who have erratic low pay also. The outcome will be these people will be forced to close down as Self Employed and seek paid employment. Those who have "done the right thing" and registered with HMRC as a Self Employed Rep for example will be tempted not to register as Self Employed and try to get away with earning a small pittance "on the side" - in fact HMRC has recently offered an amnesty to Avon Reps as this situation of Non Registering was rife!



The Unemployment stats are bound to rise, if the low paid Self Employed are then transferred to JSA until they get paid employment. I have been told from a source that the main targets of the DWP are immigrants who have become Self Employed selling the BIg Issue or betting a reps job like Avon, and have then be able to be eligible  for the more generous tax credits than if they were on JSA/Income Support. However, even looking at it from the DWP viewpoint when they transfer those not "gainfully self employed" their net will close long standing small sole traders down too, especially those in the creative arts type trades.

There are devils advocates out there who have said "Well you are claiming benefit- shouldn't the taxpayer ensure you are looking for more hours/increased pay?" Fair comment I say if we were not in the middle of a toxic storm of austerity. But many of us Low Paid Self Employed are contributing to society in many ways. Shouldn't we be rewarded for our efforts instead of facing the "stick of sanctions"?

The Conservative Party: always been the Party of the Small Business, the Sole Trader, the Party as Mr Cameron tells us daily "of those who want to get on and work hard" . Under Thatcher the Self Employed Low Paid were the very sector of the electorate she targeted to enable those to buy their council home! Seems the Self Employed Low Paid Workers are now to be demonised alongside the Unemployed, Disabled, Sick, and Young, Mums, Dads.. The list is longer every day!

Mark Hoban - Minister of DWP said on 21st January 2013

..."new demands could also be placed on the self-employed, pointing out that the tax credit system as it stands allowed people to pursue hobbies, earn nothing and subsidise their income through state support "without any expectation that they will increase their earnings and move towards self-sufficiency. This flies in the face of a principled welfare system".



So onto the Labour Party: no news yet on how they will tackle/oppose these swingeing attacks on Self Employed Low Paid Workers. Mr Miliband has spoken out about the loss of Working Tax Credit Cuts this April and the loss of those tax credits against the tax cuts for Millionaires and rightly so! Now the Labour Party need to act to defend us.

10 comments:

  1. Of course they bullied, bribed and lied to people to get them off the unemployed register. It didnt matter to them that we were in a recession and chances of getting self employed work very slim. Just dumped into self employment and told to get earning. easier said than done. In most cases people who are self employed gradually built up a customer base on the quiet, IE on the side. When they got too much work they then had to declare it. Those that the jobcentres pushed into self employment didnt have that luxury. It was find customers, find the market. I will shut down my business because I cannot meet their stupid stipulations. I am 62 so no chance of full time work. Thank you for nothing.

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  2. You get 1 year from starting your business before your expected to show a profit of 11k? I thought it was said it took 2 years to start to make ANY profit, and that was when the economy was doing OK. Im wondering if its best to close down my business just before this comes in then restart it so I get the 1 years grace period, or just give up all together?

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  3. Hi Bernadette,

    I just came across your blog via a Facebook post and have read it all. Like yourself I am passionate about finding sensible and compassionate resolutions to the many problems that the current political situation is causing for so many people, and am incensed at the divide and rule tactics being employed by TPTB to engineer this deep belief that those on benefits are responsible for the economic meltdown going on right now.

    I would like to compliment you on your style and congratulate you for your rational yet impassioned insights into what it is really like for people caught up in the system.

    If you are on Facebook I would love to add you as a friend.

    I wish you and your family all the best and hope that if we all keep plugging away at some point those in power will realise the devastating effects they are having on people who have done nothing wrong but happen to be in a position where wealth accumulation is out of their reach in a society that seems now, sadly, only to value that pursuit over all else.

    I salute you x

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  4. Thanks for this. WQhat they are doing is not unexpected. I am sure they will tell me that being a writer (self-employed, there is no other way) for a living is not a 'proper job' and I shd go get something more 'worthwhile'. I won't say what I think on here, too many of these ******** !
    J.

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  5. Many thanks for the replies and comments from everyone.

    I have had many emails and on twitter RTs and comments of support that it is VITAL to get the message out to the Low Paid S/Employed so people are aware of what is about to befall them.

    With the IT system for U Credit not on time or ready for action in the pilot pathfinder areas, there may be a delay in implementation. The Labour Party needs to come up with a firm defence for the Low Paid and I am hoping policy will soon follow.

    I am on facebook as Bernadette Horton if anyone wishes to add me as a friend.

    Thanks again and I will update this blog with anymore news as it comes in about the Self Employed.

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  6. Great blog, its crazy that at a time when millions are looking for work that part time workers will be forced to look for more. Either we try and get all unemployed back to work, even part time at first or we just give any extra work to part time workers. Surly we should be sharing it around? I employ 2 part time carers its better for me to have 2 who can cover each other than 1. I guess the same for a lot of people.

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  7. Warm thanks to the author of this precious blog. After pass out some lazy days as I had departed to my part time job and thinking of starting new dimension in my career. I don't have much ideas about self employed arena. But determined to be to so. And hunker after collecting some innovative https://www.newcareerideas.com/self-employment-ideas/. Jumping into this brilliant article I got some new experiences surely. I would like to thank the author for discussing so effective part of self employment and of course for sharing this to the needy readers like me. I Have to make another visit here frequently, I am sure of that.

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  8. Lovely post, thanks for posting.

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