The government has announced that from 1st August the Minimum Income Floor for Universal Credit, which was suspended due to Coronavirus last year, will be reinstated meaning some claimants will start getting reduced payments from September. That is the same month as a £20-a-week cut to six million claimants’ Universal Credit starts taking effect.
Kate Dearden, Head of Research, Policy and External Relations at Community, says:
“Scrapping the £20 Universal Credit uplift and reinstating the benefit cap for the self-employed is cruel and punitive.
37% of Universal Credit recipients are in employment – it is an in work benefit. These are changes that will punish workers whilst we are still in a period of economic uncertainty and recovery.
It will be particularly harmful to the U.K’s millions of self-employed workers, many of whom have already had the toughest of years being excluded from government support schemes and losing the majority of their income.
The government must be on the side of our workers. They must keep the suspension of the Minimum Income Floor, and reverse the proposed cuts to Universal Credit”
The fact that the Government were forced to suspend the Minimum Income Floor during the pandemic is a telling sign that the current Universal Credit system does not work for the self-employed. In the longer term we recommend a review of the interaction between self-employment and the benefits system, but in the short-term it is essential that the Minimum Income Floor is not reintroduced while many self-employed workers are still relying on Universal Credit to make ends meet. We therefore recommend that the Treasury extend the suspension of the MIF until at least the end of the year. Read more in our inquiry into the future of self-employment here.
Also read our calls for a Reform of the Minimum Income Floor in our report on disability and self-employment here.
If you are a member of Community and need help or advice, please contact us at firstname.lastname@example.org or on 0800 389 6332.