‘Flawed Universal Credit left me with £8.89 to live on – now I’m taking the Government to court’ Actress and theatre director Charmaine Parkin says the controversial benefit is discriminatory against people who are self-employed

A single mother-of-two has vowed to take on the Government over its ‘flawed’ Universal Credit system after she was left with just £8.89 to live on in a month.

Charmaine Parkin has alleged the six-in-one benefit system is discriminatory against people who are self-employed.

The actress says she was forced to go to food banks to feed her son, 11, and daughter, eight, because of the way her payments are calculated by the Department for Work and Pensions (DWP).

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The 34-year-old will argue in court she’d be financially better off if she gave up work completely despite the controversial benefit being introduced to “make work pay”.

She says she’s a victim of the minimum income floor (MIF), a threshold used to calculate a self-employed person’s benefits that assumes they have a certain level of earnings, even if their earnings actually dip below this in some months.

On Universal Credit, she found herself left with £8.98 for a month’s food, travel and bills once her rent was paid. Her lawyer will point out that if she applied instead for Jobseekers’ Allowance she’d be £393 a month better off.

Charmaine told i: “It’s an extremely flawed system that has left me on the bread line struggling to feed two children.

“I don’t want to be forced to sign on for Jobseekers’ Allowance, I want to be able to run my business and do what I’m trained to do and what I love doing which is my right.”

No financial stability

I thought Universal Credit would give me some financial stability and help me to budget but it’s done the opposite Charmaine Parkin

In 2016, Charmaine – who also works as a theatre director – was faced with the challenge of re-establishing her business in a new area when she moved from Bournemouth to Hove, East Sussex.

Then her financial situation became worse when she split from her partner in 2017 – which made her make a Universal Credit claim.

She said: “My ex-partner was helping to support me while I build up new business but then when I found myself on my own I needed to turn to benefits for some help, just until I got back on my feet.

“I thought Universal Credit would give me some financial stability and help me to budget but it’s done the opposite. It’s left me worse off than if I was unemployed and caused me a lot of stress and anxiety.”

The minimum income floor or MIF applies if you are self-employed and your business has been running for more than 12 months. The threshold is set at the level of the national minimum wage at 35 hours a week.

If your earnings are below this level, your benefit will be calculated using the threshold instead of your actual earnings figure. If you earn more than the MIF, you’ll see your Universal Credit payment reduced.

This rule only applies to Universal Credit and to some Council Tax Support schemes, not to other benefits.

In Charmaine’s case, she caring responsibilities for her two children so was assessed as being able to work 25 hours a week. Her MIF was calculated by multiplying the minimum wage for her age group by these hours, which came to £788.26 a month.

Working in the entertainment industry, her earnings vary by month, but if she earns less than the MIF she is treated as if she did earn £788.26 and her benefits are calculated accordingly. One month she earned only £96 and her Universal Credit payment was reduced by £375.64.

In other months she had no earnings and her expenses – she often needs to pay other people for services – exceeded her income, but the MIF was still applied.

“I’m not someone who sits around waiting for someone to give me work, I make things happen, but still the nature of being self-employed is earnings can fluctuate,” said Charmaine. “Universal Credit calculations should be simply based on what you actually earn.”

What is Universal Credit and why is it controversial? Universal Credit (UC) is being rolled out across the UK and replaces six existing benefits – Income Support, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Housing Benefit, Working Tax Credit and Child Tax Credit – with a single payment. After it was piloted in selected areas in 2013, it’s planned that Universal Credit will replace all these benefits in 2023. But campaigners and charities have criticised how long it has taken to get money to claimants amid fears families are being left without any cash to live on. Last year, the Government promised to slashed the standard wait for new claims from six to five weeks and scrapped the seven-day waiting period too. However, newspapers regularly feature reports of claimants waiting much longer including a carer for her disabled son who went 20 weeks for her full payment. This month it was announced the DWP will stop the £10 Christmas bonus payment to benefits claimants under Universal Credit.

Part-time dinner lady’s legal battle

I thought the government was supposed to help and support people like me trying to get back to work but I have found it to be the opposite Danielle Johnson

The Government has previously faced demands to overhaul the current rules for the self-employed, who can receive up to £2,500 less than an employee with the same earnings.

The Federation of Small Businesses, the Royal Society of Arts, the National Farmers’ Union, the Trussell Trust food bank charity and the Gingerbread charity for single parents have demanded a rethink of the government’s welfare reforms.

Last month single mother Danielle Johnson hit the headlines for her bid to launch a High Court case against the Government over Universal Credit.

The part-time dinner lady, 25, from West Yorkshire, says she has been forced into debt and poverty as the amount she gets changes every month and leaves her £500 a year worse off.

She said: “I have never been this financially unstable before, to the point of being unable to afford my rent and having to go into my overdraft when buying food. It is getting me into a vicious cycle of debt.

“Universal Credit is supposed to be simpler and fairer, but my experience of it is the opposite. I’m doing my best working part-time to make ends meet so that I can look after my daughter. I thought the government was supposed to help and support people like me trying to get back to work but I have found it to be the opposite.”

Tessa Gregory, partner at law firm Leigh Day which is dealing with Danielle’s and Charmaine’s cases, said: “It is very clear through the multitude of problems reported that Universal Credit is a broken and ill-thought out system. Universal Credit is supposed to ‘make work pay’.

“It is important that this issue gets addressed as soon as possible as once Universal Credit rolls out fully the numbers affected will run into the tens of thousands if not more.”

A DWP spokeswoman said: “We are unable to comment on an ongoing legal case.

“Universal Credit strikes the balance between supporting entrepreneurship and being fair to the taxpayer by helping self-employed people during the first year while they establish their business.”

Charmaine said she expects the case to be ongoing until around June next year.