This month, Quids in! is looking at ‘income maximisation’. We’re looking at anything people in poverty can do to bring in a little extra to make ends meet. We’ve beefed up the content on our website and trailed that both in Quids in! magazine and the Quids In Readers Club (our monthly money email service). We’ve added some Q&As to our Universal Credit Knowledge Bank on how the system works (or not) when someone starts earning. And it’s the theme of our Professional Network newsletter.
We were approached by The Big Issue a few months ago to explore whether Quids in! could promote selling its magazine by anyone in financial difficulty. Having worked there for 14 years, I know what a difference the organisation has made to thousands of homeless people so personally I’m okay with their decision to broaden their remit. It’s part of why Quids in! set income max so high on the financial capability agenda and I’m always ready to challenge money advisers who start to ‘gatekeeper’ options for anyone who wants to make a little extra. As our special report acknowledges, starting to make money opens many more doors because people realise they can do more.
I was, however, concerned that we’d be promoting a grey economy option and that bigging up The Big Issue could backfire on us with our paying customers, ie, authorities and social landlords. Not wanting to throw the baby out with the bath water, we firstly made sure we included the appropriate caveats about declaring earnings. But then, as we reviewed more than 20 different ways to make some extra income outside of formal employment, we realised there are plenty of opportunities to promote that don’t look quite like work. Knitting baby clothes and selling them on Etsy, selling ‘pre-loved’ stuff at car boot sales, dog-walking, baby-sitting or posing nude for art classes all, for me, fall into a similar category.
What was new to me, and something we need to add to our expanded Income Max section on quidsinmagazine.com, is a little known allowance given the nod by the taxman. Since April 2017, individuals have been allowed to earn up to £1,000 trading, and a further £1,000 if renting out storage or a parking space at home, without declaring it to HMRC. (More here.) ‘Occasional income’ is exempt from taxation, although it’s unclear whether DWP turns the same blind eye.
I believe the designers of Universal Credit did want work to pay for all claimants but there is a growing list of when it is struggling to deliver. Not so much in how the tapers and allowances work but more in how the system has failed to take account of anyone who isn’t employed on the same terms as Whitehall civil servants. Self-employed, for example, or paid four-weekly, or trading occasionally… One day historians will acknowledge how the only reason the government got away with such half-baked reforms was that any enquiring minds in opposition or in the media were 100 per cent preoccupied with Brexit.
Take the example above of knitting and selling baby clothes. You could report yourself as self-employed and making, say, fifty quid one week and a fiver the next. Universal Credit could accommodate this but won’t because you’d fail the self-employment test: Is it your main job, does it give you regular work, does it make you a profit, do you have invoices and receipts (although you probably would have this covered, if you used Etsy). Worse, after a year, UC would apply the ‘minimum income floor’ and assume that on average you earn minimum wage, 35 hours a week, 52 weeks a year, and deduct cash from your monthly payment as if you do.
We can’t blame Quids in! readers – largely social tenants on low incomes – if they feel damned if they do, damned if they don’t, when it comes to trying to better their incomes. Many just want to get ahead. Some would rather work for themselves. But amid all the red tape, mistrust and false assumptions, the State is no home to a spirit of enterprise for people on low incomes.
It’s probably a defining element of free societies that they allow their citizens to prosper. Sure, to maintain this right, we have to make good on our responsibilities to pay back in, but when we deny people the opportunities to do better for themselves and their families one of two things become inevitable: They turn against the government, or they turn against the law.
Meantime, asking people just to cut back when they can’t make ends meet is disingenuous. There are legitimate opportunities and we owe it to people to show them how. There’s often more in it for them than a few extra quid.
