Judge brings Big Issue benefits fiddle to a halt
Landmark ruling over migrants’ claims
A JUDGE has cracked down on the scandal of EU migrants selling The Big Issue as a back door to claiming benefits.
Becoming a vendor of the magazine for the homeless lets them register as self-employed and pocket handouts.
But a court has ruled that a Romanian woman who used this method to access tens of thousands of pounds of in-work benefits should have them stopped.
By selling copies of the magazine and netting £50 a week, she was able to claim £150 a week in tax credits and housing benefit.
In a key ruling, the court said the woman earned too little to claim her work was ‘genuine and effective’, so was not eligible for UK handouts. Her case came to light after she challenged a decision by HM Revenue & Customs to reject her application for child benefit.
Three years ago, then Work and Pensions Secretary Iain Duncan Smith warned ‘benefits tourism’ applied to those in work as well as the jobless, citing the Big Issue – which lets vendors keep half the cover price of each copy they sell.
EU migrants have been selling the £2.50 magazine so they can claim they do sufficient work to get a right to reside in the UK and qualify for benefits.
Because sellers work independently and deal in cash, it is difficult for the authorities to assess accurately how much work they do. In some cases, it is only a token amount.
The woman began selling the Big Issue in April 2015, three months after moving to Britain with her partner and son. She claimed to work 40 hours a week but sold only 40 magazines, which meant she made £1.25 an hour.
Her self-employed status allowed her to claim £150 a week in tax credits and have her rent paid in full. In a ruling last month, Judge Kate Markus QC said the woman’s business was not viable, so she did not qualify for benefits. Sitting in the Upper Tribunal of the Administrative Chamber, which rules on HMRC decisions, she dismissed the woman’s appeal against the First-tier Tribunal denying her claim for child benefit.
Judge Markus said the woman ‘had said she was not interested in earning more, whether through employment or other self-employment. On the evidence, she did not need to do so because of the state benefits that she received.
‘It was open to the tribunal to conclude, in the light of all the evidence, that the business was a means to obtaining benefits.’
An EU migrant must show that for three months they have earned at the level at which employees start paying National Insurance – £157 a week, equivalent to 24 hours at the National Minimum Wage. Mr Duncan Smith highlighted the problem in 2014. He praised the Big Issue but said: ‘What is happening, more and more, is people mostly from southern and eastern Europe have actually ended up being Big Issue sellers and they claim, as self-employed, immediately, tax credits.’
In 2015 rules were tightened so new EU migrants cannot receive handouts until they start work. However, a migrant who declares they are self- employed may be entitled to thousands of pounds in housing benefits and £2,000 a year in working tax credit.
An HMRC spokesman said: ‘We welcome the judgment. Only selfemployed people who are doing work which is genuine and regular can claim child benefit.’
‘Not interested in earning more’