Financial support for those affected by coronavirus

The government has announced several measures to provide financial support to those struggling to make ends meet during the coronavirus crisis, but it’s not always easy to know who qualifies or how to claim.

Lots of people are seeing their incomes plummet as work dries up, are facing redundancy, or are unable to work because they are self-isolating or unwell. These can be really worrying times, so it’s vital to get all the support you possibly can.

Here’s what you need to know about some of the benefits and financial help that you might be eligible for during these difficult times.

Government help if you’re employed

If you’re unable to work because you’ve got the coronavirus or have to self-isolate, you’ll usually be entitled to the same amount of sick pay and leave from your employer that you’d get if you were off work with any other type of illness.

Employers can either offer statutory sick pay, which is the minimum they must pay you by law if you can’t work because you’re unwell, or some may provide their own more generous rates of sick pay. If you have coronavirus or have to self-isolate, you’ll therefore be entitled to either statutory sick pay or your usual sick pay.

To be eligible for statutory sick pay, which is £94.25 a week, you must be employed rather than self-employed and earn at least £118 before tax. In order to claim it, you’ll need to let your employer know that you’re unwell or self-isolating within seven days, or earlier if your contract states a shorter deadline. You only need a sick note if you’re off work for more than seven days.

Usually statutory sick pay is only payable from day four of your illness, but the Government has confirmed employees affected by coronavirus can now claim it from day one. This measure applies retrospectively from March 13.

If you are self-isolating, you can ‘self-certify’ for the first 7 days off work, which means you’ll have to let your employer know as soon as possible, but you won’t have to get a note from a doctor or NHS 111. If you’re self-isolating due to coronavirus for more than 7 days, you can get an online self-isolation note either from the NHS website or the NHS mobile phone app.

Visit ACAS to find out the latest advice for both employees and employers. ACAS stands for Advisory, Conciliation and Arbitration Service, an independent body that works to improve workplace relationships between employees and employers.

Support if you’re not working due to coronavirus closures

The government has launched a ‘Coronavirus Job Retention Scheme’, to try and avoid companies having to make people redundant whilst they themselves are forced to close for business. Under the scheme, businesses can choose to put some employees on ‘furlough’ (which essentially means not asking them to work for a set period of time), instead of making them redundant. So, for example, this might apply if you work in a restaurant or pub that has had to close, but your employer wants to keep you on until it reopens.

For any employees put on furlough, the Government will pay 80% of their wages, up to £2,500 a month. This will be paid through normal payroll, and the Government will reimburse employers afterwards.

However, some of the finer details of the scheme are still being drafted and there may well be some firms who don’t have the cash available to pay staff,  leaving them with no choice but to make redundancies instead of putting their employees on furlough.

Whilst we sincerely hope that this will reduce the number of redundancies made in the UK (and it will be of huge value to you if you are one of those placed on furlough instead of being made redundant) – it is likely to be a case by case situation as to whether you can benefit from this scheme depending on your employer and their own set of circumstances.

You can find out more about help for businesses and their employees here.

Financial support if you're self-employed

The Chancellor has unveiled a range of measures to help the self-employed, but if you’re eligible you’ll have to wait until June to benefit.

Support if you’re self-employed and you’ve lost worked due to Coronavirus

If you’re self-employed and have filed a tax return for the 2018/19, you may be eligible for financial support from the government if your income has fallen or stopped due to coronavirus. 

The scheme will pay 80% of average monthly profits as a taxable grant, up to a maximum of £2,500 a month. When working out how much you’re entitled to, HMRC will look at your average monthly earnings over the past three tax years. If you haven’t filed tax returns for the last three years, the amount you receive will be based on the returns you have filed, even if you’ve only filed one. 

If you’re due to file a tax return for the 2018/19 tax year but missed the January 31 deadline to do this, you’ll have another four weeks to get your return in so that you’ll be eligible for support under the new scheme. Those who have only recently become self-employed won’t be covered by the scheme, as HMRC won’t have any records of their earnings yet.  You also won’t be covered if you don’t earn enough to file a self-assessment tax return. 

Those with average profits over £50,000 also won’t be able to claim financial support under the new scheme. According to the Chancellor, only 5% of the self-employed won’t be eligible due to the £50,000 cut off. 

Payments won’t be made to the self-employed until June, at which point those who are eligible will receive a lump sum covering the previous three months. 

Those who are eligible for support will be able to apply directly to HMRC, but you cannot apply for the scheme yet. HMRC will contact you if you are eligible and invite you to apply online.

Over the long term, the Chancellor hinted that the 9% National Insurance Contributions (NICs) paid by the self-employed may in future rise to the same level as the 12% NICs paid by those who are employed. Arguing that since they will essentially receive the same support as employees put on furlough during the current crisis, then they should contribue equally after the crisis resolves itself.

Find out more about the measures announced for the self-employed here.

Delayed payment of tax

Most self-employed people who pay tax via the self-assessment system must make two tax payments each year to pay their annual tax bills, one by January 31 and one by July 31. These are known as ‘payments on account’.

This year, however, in order to provide people with a bit more financial breathing space, the Chancellor has announced that July payment will be deferred, so that you’ll have until January 31 to pay your second payment on account.

Financial support if you have been made redundant or have lost your source of income

Being made redundant can be a hugely unsettling time. One thing you can do to help feel more in control of what’s happening is to read up on your rights and understand the process itself. In case it’s helpful, we’ve pulled together a comprehensive guide to redundancy which you can find here.

Additional measures have also been announced by the Government to help those who have lost their job in the way of additional benefits and mortgage holidays. We outline these below.

Universal Credit

Universal Credit is a benefit paid to people who are unable to work, or who are on low incomes and need a bit extra to make ends meet. The amount you’re entitled to is means-tested and will depend on your individual circumstances. You won’t be eligible for Universal Credit if you have £16,000 or more in savings.

The maximum monthly amount you can claim if you’re single and aged 25 or over is £317.82 a month (£3,813 a year), but the Chancellor has promised to increase the standard Universal Credit allowance by £1,000 a year for the next 12 months, which will mean the maximum amount you could claim is up to £4,813. Find out how to claim Universal Credit here.

If coronavirus stops you from going to a job centre to claim Universal Credit, you can complete your claim and get an advance payment online. The job centre might want to talk to you by phone but you should not have to go in person. People who need to claim Universal Credit because of coronavirus will not be required to produce a sick note.

If you’ve been self-employed for more than a year, there is normally a ‘minimum income floor’ which is used to calculate how much Universal Credit you can get on top of your earnings.

The Chancellor has confirmed that this minimum income floor has been suspended which should help more self-employed people affected by coronavirus access Universal Credit. He has also raised the payments for Universal Credit so that the self-employed can claim it at the same rate as Statutory Sick Pay (£94.25 a week).

Contribution-based Employment and Support Allowance

You can submit a claim for Employment and Support Allowance if you’re employed, self-employed or unemployed. It’s there to provide you with financial help if you’ve got a health condition or disability that affects how much you’re able to work.

You can’t get Employment and Support Allowance if you’re also claiming either statutory sick pay, statutory maternity pay or job seeker’s allowance, but you can get it at the same time as claiming Universal Credit.

You can get up to £73.10 a week if you’re entitled to Employment and Support Allowance and you’ll be paid every two weeks into your bank or building society account.

To qualify for Employment and Support Allowance, you’ll either need to have worked as an employee or have been self-employed and you must have paid enough National Insurance contributions in the last two to three years.

People who need to claim Employment and Support Allowance because of coronavirus will not be required to produce a sick note.

You’ll usually have to have been unable to work for seven days to be paid if you’re claiming this benefit for the first time, but if you’re suffering from coronavirus or have to self-isolate it will be payable from day one.

Find out how to claim Employment and Support Allowance here.

If you’re already claiming benefits

Please don’t worry about your benefits being stopped if you can’t get to the job centre for your regular appointments. Since March 19 anyone receiving benefits does NOT have to attend job centre appointments for at least three months.

If you have to stay at home due to coronavirus, your compulsory work search and work availability requirements will be removed during this period. Similarly, if you’re unable to attend a reassessment for any of the benefits you receive, you’ll continue to receive these benefits until it’s possible to rearrange the reassessment.

Support with mortgage or rent payments

You may also be able to get a mortgage payment holiday for up to three months from your lender if you think you’re going to struggle to make your monthly repayments. Contact them as soon as possible to discuss the options that might be available to you.

If you’re renting but think you won’t be able to pay due to the coronavirus, it’s also possible for your landlord to request a mortgage payment holiday for up to three months. They aren’t allowed to start eviction proceedings for at least the next three months to provide some protection for tenants during this time.

Where to go for more information

There are several charities and organisations which can advise you about any benefits you might be entitled to and can help you submit a claim.

These include Turn2us, which can assess your eligibility for benefits through its Turn2us benefits calculator or by phone on 0808 802 2000. The site also has a free benefits calculator which you can use to see what you qualify for.

Alternatively, you can get help from Citizens Advice. You can contact the Citizens Advice consumer helpline on 0808 223 1133.

And finally...

This is an incredibly difficult time for everyone as we battle not only a health crisis, but also increasingly an economic one. To try and help, we have pulled together a range of guides to support our members, from ideas to boost your income, through to popular side hustles, and ways to cut costs.

Are you worried about whether you’ll have enough financial support, or have you recently made a benefits claim for the first time? If so, we’d be interested in hearing from you. You can get in touch via [email protected] or post on the Rest Less Community forum. Stay safe and look after yourselves.

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