UK Music has called on the Government to protect self-employed workers in the music industry ahead of changes to Universal Credit next week.
The ‘surplus earnings’ changes, which come into effect on April 9, could affect many of the 675,000 creative industry workers (34 per cent) who are self-employed, compared with 15 per cent across the workforce as a whole.
The changes mean self-employed people, such as musicians, artists, managers, producers and concert crews who are prone to fluctuating finances, could be taken off the benefit after months where they earn more than £2,500.
They may also receive vastly reduced benefits in future months, and this threshold could be reduced to just £300 in a year’s time.
The rule could affect festival workers the most, as they have busy periods of employment in the summer months but may receive low pay for the rest of the year.
This could hit our live music industry which contributes £1 billion to the UK economy from music tourism in 2016.
Self-employed Universal Credit claimants are also subject to a Minimum Income Floor (MIF).
This assumes workers are receiving a certain amount of money each month, regardless of whether they have earned that amount or not.
Similar to the surplus earnings rules, the Minimum Income Floor does not allow for fluctuating incomes or seasonal variations.
Universal Credit is a social security benefit which replaces six means-tested benefits and tax credits.
Many people who claim Universal Credit have jobs or other employment yet their salary is low enough for them to receive benefits.
UK Music CEO Michael Dugher has written to the Secretary of State for Work and Pensions, Esther McVey, outlining concerns about the potential impact of the changes to Universal Credit (see attached letter).
Mr Dugher said:
“Self-employment is at the heart of what is Britain’s £4.4 billion music industry. We should be making life easier, not harder, for self-employed people in the industry.
“This is a complex policy and one which the Government need to explain clearly to the thousands of self-employed people working in the music industry who may be affected by it.
“Reducing the ‘surplus earnings’ threshold to £300 in 12 months could act as a huge deterrent for talented people seeking self-employed careers in music, and will undoubtedly make the industry less diverse, and ultimately less successful.
“To get this policy right, the Government should commit from the outset to maintaining the £2,500 threshold for at least the first two years and urgently review the Minimum Income Floor.