UC, self employed, MIF applied, giving up s/e and sanctions
Further to my post at https://www.rightsnet.org.uk/forums/viewthread/14572/
UC have now re-calculated my clients earnings going back a considerable period and applied a MIF generating an overpayment of £7K.
Understandably my client is not only somewhat ‘miffed’ but intends (has no practical option) but to give up s/e. Imposition of the MIF leaves them effectively destitute (profit will not even cover full rent). It remains unclear why DWP had not applied the MIF earlier (client had been on live service UC and full service now for 15 months all whilst declaring s/e earnings).
Does anyone have any experience of whether DWP will sanction a claimant if they give up s/e due to the imposition of the MIF? I note the guidance in ADM K2282 and case law ref. there.
No experience of how it works in practice but surely the whole point of the MIF is to discourage conditionality avoidance through spurious self employment. If the claimant says “OK, I accept I’ll have to seek work because my self employment isn’t going anywhere” they are doing exactly what the policy is designed to nudge them to do. It would be perverse to sanction someone in those circumstances: the price they paying is acceptance of full conditionality.
At the Equality for All conference a few months back Tom Royston was rumbling about a JR into the MIF.
I was gutted as I had a decent candidate but they didn’t want to pursue it and went into full time work instead.
Might be worth seeking advice…
Just to add: You may have some luck in getting DWP to agree that your client is not “gainfully self-employed”. Even if they are, they could partially give up the self-employment, leaving them not gainfully self-employed.
Have just emailed Leigh Day for an update,
No sanction should be applied if giving up self-employment. See para K2224 here.
Charles- thanks for that (missed it!).
This case deserves its own thread.
In addressing some of the s/e earnings reporting issues etc with the claim DWP have now retrospectively imposed a MIF and generated a £7K overpayment! I’m sure we will be arguing not gainfully employed and a host of other potential arguments! Partnership team already involved and very soon MP! Trying to establish if UC claim has now been ‘closed’ and if client will have to make a new one as no longer gainfully employed.
Dear DWP spybot - UC does not encourage / support self-employment in practice!
And the update is,
Charmaine Parkin was granted permission for a judicial review in March: https://www.leighday.co.uk/News/2019/March-2019/Permission-granted-for-judicial-review-of-universa
The hearing has been listed for 17-18 July 2019.
High Court judgment now available in Parkin, R (On the Application Of) v Secretary of State for Work And Pensions  EWHC 2356 (Admin) (19 September 2019)
Conclusion ... I dismiss this application for judicial review.
i. The circumstances of this claim are within the ambit of article 8 and I have assumed of Article 1 of Protocol 1 to the ECHR
ii. Self-employment is a status for the purposes of article 14.
iii. The MIF results in a difference in treatment between the self-employed and the employed.
iv. They are not, however, in relevantly analogous circumstances.
v. The difference in treatment, is, any event, not manifestly without reasonable foundation.
vi. The MIF is not irrational at common law.
vii. The Secretary of State complied with section 149 of the 2010 Act in designing the UC scheme.
To update our case regarding a £7.5K o/p because the SSWP originally failed to apply the MIF in each AP.
The case is now awaiting a hearing.
The SSWP’s submission and own evidence (the ‘verify self-employment’ screen generated on the UC account for each AP - but not available on a claimants side of their account - only obtained under a SAR) shows that she determined at the time of each AP that UC Reg. 64(c) did not apply - but still determined that Reg 64 as a whole was satisfied for each AP (no explanation of how!) and therefore Reg. 62 MIF did apply after all (retrospectively) and thus there was an overpayment. Unbelievable!
I wonder if these ‘hidden’ determination screens were made available in Parkin and what they recorded?
Response from Leigh Day to the High Court’s judgment in Parkin:
“It is disappointing that the High Court has decided to rule in favour of the Government. Universal Credit is failing to provide proper support for the self-employed, which is nearly a sixth of the UK’s workforce. The Minimum Income Floor continues to punish the self-employed who have fluctuating monthly income and runs completely contrary to the Government’s own stated aims of ‘making work pay’ under UC.
The Court’s suggestion that self-employed individuals can simply make employment their main activity whilst continuing their self-employment on the side is not realistic. Many individuals may struggle to find employment and even if they do would struggle to continue their self-employment on the side, particularly if they also have caring responsibilities.
The sad reality is that the MIF is likely to force many and in particular single parents to give up their self-employment. We hope that the Government will listen to all the concerns that continue to be raised by independent organisations and unions about the MIF and change its approach.”
As a post script to this thread and the issues for the same client in https://www.rightsnet.org.uk/forums/viewthread/15143 the Independent Case Examiner has now concluded an investigation and upheld all elements (bar one in part) to the complaints and has awarded a significant ‘compensation’ payment (now paid) to our client.
In their response the DWP has accepted (amongst other issues) that there were repeated problems with the UC IT system which is had failed to address. So the UC IT is not so ‘agile’ after all!