Treasury Minister Dr Alex Allinson has defended the decision to scrap entitlement to a key benefit for those who are self-employed.

Employed Person’s Allowance is currently paid to around 950 people.

Of these 52 people are wholly or primarily engaged in self-employed earner’s employment. Between them they receive EPA worth around £0.5m per year.

Under proposals set to go before next month’s Tynwald, no new self-employed claims will be accepted from September 1. Existing claimants will retain eligibility for up to 12 months.

Treasury says it’s about fairness as self-employed claims rely on reported profits which often cannot be verified.

But the changes have provoked strong criticism.

One childminder posted on Facebook: ‘As a self-employed single mum of two who works as a childminder so I can be around for my children’s needs, I am going to be left unable to feed or clothe my children or put a roof over our heads.’

Another said: ‘This is insane! EPA was the only way I managed to keep a roof over my kids' heads being a self-employed childminder after becoming a single parent.’

Other critics claimed that EPA provided vital income in the early days of some business start-ups.

The change has been made as Treasury say it has no way of accurately verifying how much self-employed claimants are earning or how many hours they are working as all of this is self-declared.

But the Treasury Minister insisted: ‘No one is accusing self-employed people who are claiming EPA of lying.’

He said: ‘This is not a measure targeting the self-employed - it is addressing a small problem with those who are self-employed but earn so little through this that they are claiming benefits which indirectly are supporting their business.

‘EPA is essentially supporting 52 small businesses currently, which on the face of it cannot, and most likely will not, provide those operating them with an income which is sufficient to maintain them and their families. Social Security officers believe that it is inappropriate.’

Dr Allinson said this could be described as creating an unfair advantage to those who are running their own business without EPA support.

The Treasury Minister said there were only three self-employed childminders currently claiming EPA.

He said: ‘The proposed changes involve a 12-month period so that we can work with all those 50 people currently receiving EPA who are classed as self-employed to allow them to earn a decent standard of living and not need benefits or transition into a part-time job where they will still be eligible for EPA if they qualify with respect to hours and pay received.

‘A minority may end up receiving other benefits such as income support, but these will be handled on a case-by-case basis.’

Around 700 - three quarters - of total EPA claimants are women. Twelve people are claiming EPA on the basis that they are a disabled worker.

Based on the current self-employed cohort, the average amount paid to a claimant is £193.96pw, or just over £10,000 a year.