Plans to remove £10k benefit from self-employed

Some self-employed people are paid about £10,000 a year on average in Employed Person's Allowance

Plans have been put forward to strip self-employed people of benefits worth £10,000 on average from September.

The Isle of Man Treasury said about 50 people would be affected by the proposed change in eligibility for Employed Person's Allowance (EPA).

The income-related social security payments are made to families and disabled workers with calculations based on a minimum number of hours worked.

A Treasury spokesman said some claimants may not be declaring the "full extent of their income" which presented a "significant risk" of them being over paid.

EPA payments rely on claimants reporting profits, which were "often unverifiable due to cash-based income and untracked hours", he said.

Of the 950 claiming the benefit in December last year, 52 were self-employed, with payments to that group totalling £500,000 last year.

The occupations of claimants included a childminder, a children's entertainer, a handyman and home baker.

Alex Allinson said the Treasury EPA was "not appropriate" for self-employed people

Treasury Minister Alex Allinson said having "considered a number of options" it had been "concluded that EPA is not appropriate for the primarily self-employed".

"Officers were unable to verify the income or hours worked by claimants and around 40% report earnings below the minimum wage, which raises questions about the sustainability of such businesses," he said.

He said the government was "committed" to providing financial support to workers "in genuine need", while making sure payments were "targeted, secure and reliable", he added.

Politicians will be asked to support the changes at the July sitting of Tynwald.