The Association of Independent Professionals and the Self-Employed (IPSE) has backed the Liberal Democrat leader Vince Cable’s calls for a halt to the roll-out of Universal Credit.
The IPSE particularly backs his calls to take fluctuating income into account and assess earnings not over one month but several.
Ahead of today's Autmn Budget, Cable, the former Business Secretary, has called on the government to immediately pause its rollout of Universal Credit for the good of people in most need of support.
In an article he wrote for the Mirror, he said: “While the current government’s handling of UC [Universal Credit] has left it on life support, Liberal Democrats argue that with a pause followed by some major reforms, the system could yet be salvaged.”
Hundreds of thousands of people are claiming Universal Credit, but cuts to funding, IT problems, late payments and a lack of support in navigating the complex claim process has seen significant hardship for many, pushing some renters to the brink of homelessness.
Labour’s John McDonnell also wants to see Chancellor halt the highly contentious rollout of Universal Credit.
Earlier this year, the Liberal Democrat Department for Work and Pensions (DWP) spokesperson, Stephen Lloyd, warned that Universal credit could cause up to 1.3 million evictions from privately rented homes because delays in payments meant more tenants were in rent arrears.
The MP, like many housing experts, would like to see universal credit's rent element paid directly to landlords.
Some 73% of landlords lack confidence in renting to tenants on Universal Credit due to uncertainty that they will be able to recover rent arrears, according to the Residential Landlords Association.
At present, as well as suffering from significant delays, Universal Credit penalises the self-employed by not accounting for their fluctuating incomes. It can leave a self-employed person up to £3,000 worse-off a year compared to employees earning the same amount, the IPSE says.
Jordan Marshall, policy development manager at the IPSE, commented: “Universal Credit has been a disaster for many people – particularly the self-employed. At present, it simply does not work for them. Not only are they suffering from the severe delays of this creaking system; it also penalises them for their way of working.
“Vince Cable is absolutely right: the current system of calculating Universal Credit payments on a monthly basis doesn’t consider the fluctuating nature of self-employed income.
“Calculating payments over a few months, or as IPSE prefers, over the course of the year, is a much fairer approach.
“To make Universal Credit really work, the government should also listen to Mr Cable’s call to give the self-employed more time to get their businesses up and running before the monthly assessments kick in.
“The current 12-month grace period forces people to abandon their businesses before they have a chance to succeed.
“Mr Cable’s suggestion to increase this period from 12 to 24 months is a step in the right direction, although IPSE would like to see this extended even further.
“Then, this flawed system could be made to actually work for the UK’s self-employed strivers.”
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