A self-employed woman has been given permission to take forward a judicial review of the government’s decision apply the minimum income floor (MIF) to her claim for universal credit.
Charmaine Parkin, 34, of Brighton, argues in her legal case that by applying the MIF to her claim for universal credit (UC) she is left worse-off than if she were unemployed. The High Court has now ruled that her case is arguable and that the judicial review can proceed to a full hearing on a date yet to be set.
The MIF is applied only to claimants assessed to be gainfully self-employed and is equivalent to the claimant’s National Minimum Wage for their age group, assuming they worked an expected number of hours each week. Every £1.00 of assumed earnings over and above £192 reduces a claimant’s UC award by 63 pence.
Charmaine has caring responsibilities for her two children and was therefore assessed as being able to work 25 hours a week, this was multiplied by the minimum wage for age group to calculate her MIF, which was set at £788.26 each month.
The nature of Charmaine’s work means that her earnings fluctuate from month to month; however, if she earns less than the MIF she is treated as if she did earn that much, and her benefits are calculated accordingly. One month she earned only £96 but was treated as if she had earned £788.26 and her Universal Credit payment was reduced by £375.64. In other months she had no earnings and her expenses exceeded her income, but the MIF was still applied.
Her reduced benefit makes it impossible for her to pay her rent and meet essential living costs. Charmaine has been forced to seek assistance with covering basic expenses like utilities bills and has had to get help from food banks on multiple occasions. She is continuing with her work but is finding the process of applying for help from various organisations extremely time consuming in addition to being humiliating.
To Charmaine, giving up her work seems to be the only way to receive the amount of assistance that would be sufficient to feed her family and keep a roof of their heads. An unemployed individual in her position would have almost £400 a month more in UC and this amount would help her cover essential living expenses for herself and her children. It would also give her a stable income and allow her to apply for reduced council tax. It would mean she would have to worry less about putting food on the table for her children every day.
“I am delighted that the court has granted permission for my judicial review. I am determined to hold the government accountable for its flawed universal credit system which is causing misery to so many. It cannot be right that a system designed to help support people in work has resulted in some people being better off if they give up their work.”
Tom Short, solicitor, who is working on the case with Carolin Ott, both from law firm Leigh Day, added:
“Our client is one of the many self-employed people suffering from the application of the MIF. The effect of the MIF is particularly harsh on those who work in areas such as the entertainment industry and farming where fluctuations in income are common. Our client’s situation shows just how illogical and inconsistent the universal credit system is and we look forward to putting her arguments to the court.”