IPSE: Warning as hundreds of thousands of self-employed face cut-off from “crucial Universal Credit lifeline”

IPSE has warned that hundreds of thousands of self-employed people face being cut-off from their “crucial lifeline” when the government reintroduces the Minimum Income Floor for Universal Credit next month.

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This is after IPSE research showed there had been a 341 per cent increase in the number of self-employed people claiming Universal Credit during the pandemic – from 46,700 to over 206,000.

IPSE has urged the government not to reintroduce the Minimum Income Floor, arguing it was an “unfair impediment” to freelancers even before the pandemic.

Recent research by the charity Turn2Us suggested the cut to affected self-employed people’s incomes could be as much as £3,200 a year if the Minimum Income Floor is reintroduced next month.

Fred Hicks, Senior Policy and Communications Adviser at IPSE (the Association of Independent Professionals and the Self-Employed), said: “Even before the pandemic, the Minimum Income Floor (MIF) was an unfair impediment to struggling self-employed people: it failed to account for their naturally fluctuating incomes and therefore barred many from Universal Credit.

“During the pandemic, government rightly suspended the MIF and our research showed this led to a 341 per cent increase in the number of self-employed people who could access Universal Credit. Indeed, for many of the million self-employed people who are still excluded from the Self-Employed Income Support Scheme (SEISS), Universal Credit has been the only support open to them.

“The self-employed sector has been devastated by the financial impact of the pandemic and for struggling freelancers, this damage won’t disappear as soon as the economy opens up. Therefore, we are urging government to keep the Minimum Income Floor in place – not only as a support for self-employed people who are still struggling, but also as a way to rebalance the UC system and make it work for self-employed people in the long-term.”

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