Self-employment for people with disabilities (UK)

In the UK, self-employment is a popular option for disabled people. Of those in paid work, 18 per cent of disabled men and 8 per cent of disabled women are self-employed as their main job, compared to only 14 per cent and 6 per cent of non-disabled men and women respectively.[1] Unfortunately, many people are not familiar with the rules that can help disabled people into self-employed work.[2] Self-employment is also sometimes the only option for some disabled people who may require flexible working patterns as a result of their impairment.[3]

UK self-employment and benefits

Being at a disadvantage in the workplace means one is more likely to be isolated from the rest of society: to be socially excluded. UK policy has created a number of different programmes which have the aim of addressing social exclusion through employment,[4] including self-employment. One example, which aims to address the additional barriers disabled people face, is the Access to Work programme, which may provide impairment related equipment, support worker and travel costs for self-employed disabled people (if you are unable to use public transport) Access to Work.

There are also opportunities to work whilst claiming some benefits, such as Employment and Support Allowance and Disabled Persons Tax Credit. For example, Employment and Support Allowance (ESA) allows disabled people to do some (‘Permitted’) work, which includes self-employment, not only as a route to independence, but also to ‘allow them to be socially included’.[5] This 'permitted work' must satisfy a number of criteria.[6] For example, if a disabled person’s income is less than £20 per week, they can work any number of hours whilst still claiming ESA.[7][8] [9] Income-related ESA is non-taxable whilst contribution-based ESA is taxable.[10]

Universal credit

Under universal credit, if you’re gainfully self-employed then a minimum level of income from self-employment will be assumed, even if your actual income is lower than this. This minimum level of income will not apply to anyone who is found to have a limited capability for work, following a work capability assessment. This minimum level of income is determined by the claimant’s individual circumstances, so long as a self-employed person's profits allow them to pay themselves more than the minimum wage. Income is calculated by the number of hours a claimant is expected to work multiplied by the National Minimum Wage. Some self-employed people with low profits will not necessarily be in a position to pay themselves this minimum wage. Thus, the hours a person are expected to work and the assumed income level will reflect the circumstances of self-employed people only if their profits bring in more than the minimum wage. This will not always be the case if/when profits are low.

Disabled self-employed claimants will still be subject to universal credit self-reporting requirements. Universal credit is said to encourage disabled people to take self-employment as a route to independence and social inclusion, providing it is the right path for them and providing that the standard 'expected' hours and 'assumed' income levels are not applied.

Notes

  1. ↑ Boylan, A. and Burchardt, T. (2002) Barriers to self-employment for disabled people, Report for the Small Business Service, available at http://www.berr.gov.uk/files/file38357.pdf, last accessed January 2010
  2. ↑ Boylan, A. and Burchardt, T. (2002) Barriers to self-employment for disabled people, Report for the Small Business Service, available at http://www.berr.gov.uk/files/file38357.pdf, last accessed January 2010
  3. ↑ Association of Disabled Professionals (2007) 'Setting Up In Business? A Resource Guide for Disabled People and their Advisors', ADP, availability details at http://www.adp.org.uk/news.php
  4. ↑ http://www.direct.gov.uk/en/DisabledPeople/Employmentsupport/WorkSchemesAndProgrammes/DG_187696
  5. ↑ DWP (2008) Technical Factsheet T3: Permitted Work, Voluntary Work and Test Trading Rules, http://www.dsdni.gov.uk/t3_current_work.pdf
  6. ↑ DWP (2008) Technical Factsheet T3: Permitted Work, Voluntary Work and Test Trading Rules, http://www.dsdni.gov.uk/t3_current_work.pdf
  7. ↑ DWP (2008) Technical Factsheet T3: Permitted Work, Voluntary Work and Test Trading Rules, http://www.dsdni.gov.uk/t3_current_work.pdf
  8. ↑ Welfare Reform Act 2007 available at http://www.opsi.gov.uk/Acts/acts2007/pdf/ukpga_20070005_en.pdf
  9. ↑ Disability Alliance (2009) Factsheet: Work for people who are sick or disabled, http://www.disabilityalliance.org/f35.htm
  10. ↑ Low incomes Tax Reform Group http://www.litrg.org.uk/low-income-workers/state-benefits#esai

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