Change is said to impact around 50 individuals currently claiming EPA
If proposed regulations are approved by Tynwald at next month’s sitting, people who are wholly or primarily self-employed will no longer be eligible for Employed Person’s Allowance (EPA).
The social security benefit is income-related and paid to families and disabled workers who are employed for at least a minimum number of hours each week.
The number of required work hours depend on personal circumstances and children's ages, while the amount payable is based on family makeup, housing and childcare costs, and income.
Treasury says that while eligibility for employed individuals is based on verified earnings and hours worked, self-employed claims rely on reported profits, which are often unverifiable due to cash-based income and untracked hours.
If approved, changes to the regulations will take effect from 1 September 2025 and no new self-employed claims for EPA will be accepted from that date.
Existing claimants - around 50 individuals out of the 950 people receiving EPA currently - will retain eligibility for up to 12 months.
Treasury Minister Alex Allinson said: "Treasury is committed to providing financial support to workers in genuine need, while ensuring benefits are targeted, secure and reliable.
"Having considered a number of options, it’s been concluded that EPA is not appropriate for the primarily self-employed — officers are unable to verify the income or hours worked by claimants and around 40 percent report earnings below the minimum wage, which raises questions about the sustainability of such businesses."
He added: "The Social Security team will work with those affected, and the Employment Services Team can help them find flexible work.
"For those intending to continue being self-employed, the Department for Enterprise can provide free of charge training and mentoring to help their businesses grow, with financial support available for eligible businesses."
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