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Universal Credit: universal stitch-up

LAST MONTH the Freelance highlighted the parliamentary consultation on the regulations govering Universal Credit, which is expected to have a severe impact on freelance and part-time workers. The NUJ has now submitted a response to the consultation, which has also seen responses from bodies such as the Federation of Small Businesses and the Low Incomes Tax Reform Group.

Universal Credit allegedly simplifies welfare by rolling all benefits - working tax credit, child tax credit, housing benefit and so on - into one. But the new rules are even more complex. People who claim what's now called "Working Tax Credit" because of low earned income will have to submit monthly reports, alongside yearly tax returns.

It seems that some time after the October 2013 target date for Universal Credit there will be a transitional "pilot" phase, after which the Universal Credit regime will kick in, and self-employed claimants could be sent on compulsory courses on stacking supermarket shelves if they don't earn enough in any one month.

It's becoming more difficult for us to maintain, let alone increase, our incomes. But the proposals are likely to subject claimants earning below a "minimum floor" - the minimum wage for 35 hours, about £212 per week - to the harassment of "sanctions" already faced by people claiming unemployment benefits.

A recent example of this was more than 22,000 warning letters being sent - incorrectly, as it turned out - to "warn claimants of a potential loss of benefits if they fail to participate in the schemes" as directed by Jobcentre Plus, a series of errors for which the Department for Work and Pensions was criticised in a High Court judgment delivered by Mr Justice Foskett.

The Universal Credit consultation memorandum claims, "The policy intent for applying a Minimum Income Floor is to encourage and incentivise [sic] individuals to increase their earnings..." Welfare blogger Johnny Void points out that under the new measures it will no longer be an employer's responsibility to pay the minimum wage, but a worker's responsibility to earn it.

Last modified: 11 Aug 2012 - © 2012 contributors
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