THE GOVERNMENT needs to revisit Universal Credit (UC) over fears it could leave both the self-employed and those on in-work benefits worse off, according to Citizens Advice.

A Citizens Advice report, based on new research, has found that self-employed workers on UC could receive far less than employees earning the same amount.

It highlights issues with the minimum income floor, which assumes everyone claiming UC who has been self-employed for a year or more is earning the national minimum wage (NMW).

If they earn less than the NMW one month, their UC payment will not make up the difference, but, if their monthly earnings go over the NMW, their payment will be reduced.

Citizens Advice says this risks causing financial hardship, as self-employed workers often earn different amounts from one month to the next.

Its analysis shows that a self-employed worker who earned £9,750 a year would be £630 worse off under UC than an employee with exactly the same circumstances.

A second report found that employees could also be at risk of financial insecurity when they move to UC.

Citizens Advice asked 877 people receiving in-work benefits how they would cope with a £100 drop in their monthly income, roughly the average amount affected households stand to lose.

Some 26 per cent said they would not be able to top up their income through employment even though they might need to, with a third saying this is because they already work full-time.

Citizens Advice chief executive Gillian Guy said the government should also review the work allowance reductions "to ensure workers who can't increase their income through employment aren't left struggling to make ends meet."