PARLIAMENTARY WRITTEN QUESTION
Universal Credit: Self-employed (5 September 2017)

To ask the Secretary of State for Work and Pensions, if he will commission an independent review of the universal credit minimum income floor to improve its responsiveness to the conditions of people in self-employment; and if he will suspend the introduction of that floor for self-employed claimants until such a review has been completed.

Asked by:
Alison McGovern (Labour)

The Minimum Income Floor is designed to address flaws in the current system which allow some self-employed claimants to receive full State support while declaring low or zero earnings. It also prevents people from under-declaring earnings. This situation is unsustainable and unfair on the taxpayer.

The Minimum Income Floor is expected to encourage those reporting very low self-employed income to increase their earnings. Some people will respond to this by increasing their earnings from self-employment, others will look for other employment to increase their income and it is applied equally across all sectors of self - employment.

In addition, the Government recognises the need for claimants who are setting up a business to be given time to establish themselves and develop their business and customer base. That is why claimants who are gainfully self-employed and within one year of starting out in self-employment will be eligible for a ‘start-up period’, during which the Minimum Income Floor will not be applied for up to 12 months.

We will continue to monitor and evaluate the impact of self-employment alongside the roll out of Universal Credit.

Answered by:
Damian Hinds (Conservative)
10 September 2017