The Shitty Reality of Universal Credit as a Freelancer

I signed up for the scheme as a self-employed freelancer, and the nightmare began.
Stock image. Photo: Emily Bowler 

Universal Credit: better off in work. At least, that’s according to the Department of Work and Pensions (DWP). In reality, however, this is not the case.

Some months ago I was assaulted. It triggered my depression, something I’ve struggled with since my teens. I became suicidal. Far from offering me the support I needed, my employer decided to let me go.

I signed up for Universal Credit as a self-employed freelancer, and the nightmare began. At the Jobcentre, staff seemed utterly clueless as to how Universal Credit actually worked, and were unable to tell me how much I’d be eligible for each month, even after using an online calculator.


Worse still, I quickly realised that any freelance earnings at all would wipe out my monthly UC payment, despite not actually giving me enough to live on. The system of calculating via household – in this case, my partner and I – meant that they seemed to expect me to live on the money of my significant other. This is something I’ve never done. My partner’s wage is stretched thin enough with one half of our exorbitant London rent already, without me relying on him for food, bills and the other half of our housing costs.

Universal Credit had left us in an impossible dilemma. If I want to work freelance, which at the moment is the best option for my health, my Universal Credit payment disappears, instead of topping up my earnings. According to gov.co.uk, Universal Credit payments reduce gradually as you earn more – for every £1 you earn your payment reduces by 63p. In practice, this does not appear to be the reality.

Due to the come-and-go nature of freelance work, some months are more difficult than others. If I’m paid for past labour at the beginning of one month, I’m bound to declare it to the DWP at the end of that month, effectively wiping my UC payment for the next 30 days and leaving me with nothing to live on, as the freelance payment has already been spent on housing costs.

Universal Credit was established in 2010 and began a gradual roll-out in 2013, supposedly to simplify the system of benefits by rolling six other benefits (Child Tax Credit, Housing Benefit, Income Support, Job Seeker’s Allowance, Employment and Support Allowance and Working Tax Credit) into one payment, and to ensure that everyone is better off in work.


The system of calculating payment by household is inherently flawed, particularly for couples who live together but don’t share their earnings. In this way, Universal Credit forces a moral judgement about one partner paying more for necessities on to couples who simply do not live this way. Tax isn’t calculated by household, so why should benefits be?

A friend of mine earned £600 in a month from freelance work, and lost the entirety of their £1,300 Universal Credit payment because their earnings pushed them above the household cap.

Receiving more on Universal Credit than through freelancing or part time work doesn’t mean that UC payments are too high or that life on benefits is easy. Payments are often delayed by weeks at a time, pushing people into debt and forcing them to rely on food banks and high interest loans in order to stay alive.

It shows that freelancers and people who are unable to work full time are actually penalised by Universal Credit. More and more people are being pushed into insecure gig economy jobs or choosing part time work for a variety of reasons, including the lack of permanent positions available. These wages are can be impossible to live on alone without extra support, raising questions about the exploitative nature of some employers who can get away with paying as little as possible and leaving people in poverty.

I’m far from the only one. According to Dr Robert Gewolb, research by the loan comparison site FairMoney shows that a large proportion of Britons feel that they are in the worst financial position that they have ever been in. He told VICE: "With 14 million Brits still living in poverty, this affects those who rely on Universal Credit the most and especially those who work freelance or part time.


“Whatever your opinion is of the benefits system, driving people off the end of a financial cliff does not help anyone in society.”

Sam* feels similarly trapped by Universal Credit. He has autism and isn’t able to work full time. He says: “It seems like it's a system designed to push people into arrears that way you'll always owe someone money.

sad freelancer

Photo: Andriy Popov / Alamy Stock Photo

“The process from leaving benefits into work isn't easy. And then if you're in debt or owe money they will contact your employer to take money from your wages. And then it makes me wonder if working is really worth it or not.

“You don't have any control over anything and if you are in arrears with your landlord they will take that off your UC payments even though you have bills to pay on the date the payment goes into your account which leaves you next to nothing to live off or get food.”

Keira* is an academic who became freelance after cancer treatment. When forced to reduce her work due to her mum having dementia and needing more care, she signed up for Universal Credit.

She says: “I was questioned like I was under interrogation for a crime. I would rather have the operation and six rounds of chemo than go back again. All I need is some support until I can get a few clients again but now I'm feeling too low to go out my front door.”

Responding to the claims in this article, a spokesperson from the Department of Work and Pensions commented: “Universal Credit is a force for good, and more than 1.7 million people currently receive the benefit successfully.

“Universal Credit strikes a balance between supporting people who are self-employed, while retaining fairness to the taxpayer. People are given a year to grow their business before the Minimum Income Floor is applied – they are then supported to either grow their business or find additional work.”

If the Conservative government was truly interested in supporting people to return to work, the system of Universal Credit would be designed to do so, rather than actively leaving people worse off who rely on freelancing or part time work.

*Names have been changed.