This is a subscriber-only article
The Ulster Farmers’ Union along with Advice NI and Rural Support, have expressed their collective concern for self-employed people who currently rely on tax credits and who will be impacted by the UK government switch over to Universal Credit.
The system of Universal Credit is replacing a number of benefits, with potentially negative implications for self-employed people who don’t have a steady income each month. Rather than being based on annual income, to claim under the new system, the self-employed have to supply monthly “cash-in and cash-out”” figures.
Where there is a cash surplus in a particular month (for example, farm payments or livestock sales), it could mean no Universal Credit is received, and depending on the amounts involved, could have implications for subsequent months. In other months were income is limited, the system has a “minimum income floor” where it is assumed you are earning the same as someone in paid work (based on the National Minimum Wage).
In NI, the Department for Communities has confirmed it will start to issue migration notice letters from 16 October 2023, initially starting with those receiving working tax credits and/or child tax credits.
Implications
There are some transitional provisions which will help ease the move for self-employed people from tax credits to Universal Credit, including a 12-month exemption from the “minimum income floor”.
However, according to Kevin Doherty, the chief executive of Rural Support, the switch to Universal Credit will have significant implications for those who rely on tax credits, and in particular those with children of school age.
“We know many will struggle with the monthly reporting element. They need to be aware of the change to Universal Credit, what is involved and the implications, which for most families will see further reduction to their household income,” he said.
Also commenting, UFU deputy president William Irvine said the process of managed migration to the new system will create huge uncertainty for farm families.
“The change to Universal Credit completely dismisses the pattern of income and expenditure for most self-employed businesses, especially farms,” he said.
The UFU along with Advice NI and Rural Support have called for changes, including that actual earnings are used in the Universal Credit assessment rather than the “minimum income floor”.
A Universal Credit helpline is available at 0800 012 1331. Support is also available from Advice NI on 0800 915 4604 or visit www.adviceni.net.
SHARING OPTIONS: