A freelance actor and director has lost a High Court challenge against the government’s Universal Credit scheme, which she argued had left her worse off than if she had been unemployed.
Charmaine Parkin, supported by union Equity and solicitors Leigh Day, brought the challenge against the scheme’s minimum income floor, which applies if someone is self-employed. This assumes a monthly income from the claimant’s self-employment based on the national minimum wage, irrespective of their actual earnings.
According to her solicitors, Parkin earned just £96 one month, but was treated as if she had earned £788.26 and her credit payment was reduced by £375.64. In other months, she had no earnings and her expenses exceeded her income, but the MIF still applied.
Parkin maintained that she would have been better off unemployed, as an unemployed person in her position would have received £400 a month in credit.
In court, she argued the MIF was discriminatory and irrational, but the High Court ruled that the different treatment for self-employed and employed individuals could be justified.
The High Court said that although there was discrimination and different treatment, unprofitable self-employment should not be subsidised.
It added that if a Universal Credit claimant could not sustain themselves through self-employment, they could elect not to be treated as self-employed all the time and mitigate their circumstances by finding employment work.
Tessa Gregory, who represented Parkin, said Universal Credit was 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’,” she said.
She added: “The Court’s suggestion that self-employed individuals can simply make employment their main activity while 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.”
Gregory said the MIF was likely to force people like Parkin to “give up their self-employment”.
Equity said that an appeal was unlikely to be successful and would not be pursued.
The union said it will continue to campaign for the MIF to be abolished.