Coronavirus welfare issues explained with Citizens Advice
Regularly updated information written in partnership with Citizens Advice to address common issues faced by young people with cancer and their families.
Last updated: 1 August 2020
The Coronavirus Job Retention Scheme
The government Coronavirus Job Retention Scheme gives employers to access support to continue paying the wages of employees who would otherwise have been laid off during this crisis.
Under the scheme an employer and an employee can agree that the employee will be placed on furlough for a period of between three weeks and three months. This means the employee will be kept on the payroll, even though they aren’t working.
The employer will be able to claim a grant of up to 80% of the employee’s regular wages, up to a maximum of £2,500 per month.
The scheme has been updated as of 1 July 2020.
Some key points about the Job Retention Scheme:
- You must have been on your employer’s PAYE payroll as at 19 March – but if you left your job after 28 February and before 19tMarch, your employer will be able to re-employ you in order to include you in the scheme
- While you are on furlough you won’t be able to do any work for your employer, but you can work for another employer if this is allowed by your existing employment contract. You can also undertake training required by your existing employer
- The scheme doesn’t cover those who are self-employed. However, those who take a PAYE salary from their own company can be covered for 80% of that salary (but not any dividends)
- The scheme doesn’t cover you while you are on sick leave (including sick leave when you are self-isolating because you have COVID-19 symptoms or live with someone else who has symptoms) but can cover you when you return. In practice you may be able to go on furlough as an alternative to sick pay, if your employer agrees to this.
- The scheme can cover you when you are shielding in line with public health guidance (or need to stay home with someone who is shielding) and you are unable to work from home – but note that shielding is being paused in England, Scotland and Northern Ireland with effect from 1 August and in Wales with effect from 16 August.
- The scheme can also cover you if you are unable to work because you have caring responsibilities resulting from coronavirus. For example, employees that need to look after children can be furloughed
- The government has said that it does not expect many public sector employers to use the scheme, as public funding for their salary costs is for the most part continuing
- Most importantly of all, you can only be covered by the scheme if your employer agrees – an employee has no right to require their employer to include them in the scheme.
1 July to 30 July 2020
- No employee can be furloughed who had not already been furloughed for at least three weeks before 1 July
- Furloughed employees can work for their employer part time. The employer will be responsible for their full pay for the hours they work and for the associated NI and pension contributions
- The employer will receive a grant for the hours that the employees do not work, calculated by reference to the usual hours worked.This grant is equal to the lesser of 80% of average earnings for the un-worked hours or £2,500 per month, adjusted for hours worked. The employer can choose to pay their employee more. The government also pays the employer’s National Insurance and pension contributions for the un-worked hours.
- The employer can submit claims on a weekly basis.
1 August – 31 August
- As above except that the employers will have to pay the employer’s NI and pension contributions for employees’ un-worked hours.
1 September – 30 September
- As above but the grant for un-worked hours falls to 70% of average earnings with a cap of £2,187.50 per month. This amount has to be paid to the employee. The employer is expected to pay the employee 10% up to a cap of £312.50.
1 October – 30 October
- The grant for un-worked hours falls to 60% of average earnings with a cap of £1,875 per month. The employer is expected to pay the employee 20% up to a cap of £
Self-employment Income Support Scheme
This scheme allows some self-employed people to claim a grant worth a specified percentage of past trading profits. The scheme has been extended. If you were eligible for the first grant and can confirm to HMRC that your business has been adversely affected on or after 14 July 2020, you’ll be able to make a claim for a second and final grant from 17 August 2020.:
The scheme allows you to claim a second and final taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £6,570 in total.
As with the first grant HMRC will contact you if you’re eligible, which you should be if you’re a self-employed individual or a member of a partnership and you:
- have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
- traded in the tax year 2019-20
- are trading when you apply, or would be except for COVID-19
- intend to continue to trade in the tax year 2020-21
- have lost trading/partnership trading profits due to COVID-19.
Your self-employed trading profits must also be less than £50,000 and more than half of your income should come from self-employment.
You won’t be eligible if you trade through a limited company, although if you pay yourself a PAYE salary you should be covered by the Job Retention Scheme (see above) for up to 80% of that salary (but not for any dividends).
Check whether you can claim a grant through the Self Employment Income Support Scheme.
Statutory Sick Pay
If you are self-isolating because you have COVID-19 symptoms or live with someone else who has symptoms you can now be treated as unfit for work for the purposes of Statutory Sick Pay (SSP), and will if necessary be able to get an “isolation note” from NHS 111 online to demonstrate this.
SSP can be paid from the first day of self-isolation and should be claimed from your employer. The rate of SSP is £95.85 per week.
It is not possible to be furloughed and receive SSP at the same time – it will often be better to try and get furlough payments rather than SSP.
Many zero-hours contract employees will qualify for Statutory Sick Pay – get advice if you are unsure.
Contractual Sick Pay
If you are self-isolating because you have COVID-19 symptoms or live with someone else who has symptoms, whether you will be entitled to contractual sick pay (assuming your contract provides for this) is a question of contract law. It is possible that your employer will refuse to treat you as unfit for work unless you have a doctor’s certificate to that effect. It is likely that many employers will be sympathetic to a request for contractual sick pay in these circumstances, but this cannot be guaranteed.
Returning to work
A cancer patient can ask their employer to make ‘reasonable adjustments‘ to take account of their health condition, including any extra vulnerability due to the current situation. Additionally, if an employee reasonably believes that there is a ‘serious and imminent danger’ which they cannot avoid then they are entitled to take steps to protect themselves, including leaving the workplace. A dismissal in these circumstances would be automatically unfair. This safeguard applies to all employees even those with less than two years’ service. Citizens Advice has more information on this.
There are options available if you are concerned about returning to work because you live with someone who is vulnerable.
1. Universal Credit
Universal Credit (UC) is a means-tested benefit which can be claimed to supplement a low income and to support rent obligations if you have savings and other capital (excluding your home) worth less than £16,000.
If you are part of a couple, you and your partner must claim UC jointly and both parties’ incomes and savings are taken into account.
It may make sense to claim UC even when you have earnings (including SSP or furlough payments), especially if you have rent obligations.
Your first UC payment is paid 5 weeks after your claim, but you can ask for an advance payment, to be repaid over subsequent months.
Universal Credit and other benefits were scheduled to increase by a modest amount in April 2020, but further increases of £20 per week have now been made to Universal Credit and Working Tax Credit, applicable until April 2021.
Universal Credit permanently replaces a number of other benefits, including Child Tax Credit, Working Tax Credit and Housing Benefit. If you are already receiving any of these other benefits, take advice before claiming UC.
2. New Style Employment Support Allowance (ESA)
If your or your partner’s capital or income mean that you cannot claim Universal Credit, it may be possible to get New Style ESA. This is a contribution-based benefit available to people who cannot work, and have a consistent record of making National Insurance contributions over the last two tax years.
It is claimed by an individual rather than a couple, and is worth an initial £74.35 per week if you are 25 or over and £58.90 if you are under 25. A sick note will not be required if you are self-isolating.
You can claim new style ESA if you are caring for a child who is isolating in accordance with government guidance.
3. Local Housing Allowance
The Local Housing Allowance rules limit the amount of rent which can be covered for many private tenants claiming Universal Credit or Housing Benefit. There has been a significant increase in many LHA rates until April 2021, meaning that some claimants will see a reduction in the shortfall between their rent and the corresponding benefit payment.
4. Work Search Requirements
All work search and other work-related requirements for Universal Credit and Jobseekers Allowance claimants have were suspended because of Coronavirus, but this suspension has now been lifted.
5. Disability Benefits (including PIP and DLA) and Work Capability Assessments under Universal Credit and Employment Support Allowance
Reviews or reassessments across all benefits were suspended, but are gradually being reintroduced.
Where awards are due to expire, end-dates may be extended so that claimants continue to receive financial support at their current rate, but contact the relevant helpline if you have not heard anything and your award is expiring.
Face-to-face assessments remain suspended for the time being.
The (previously 6 week) period to return a PIP2 or DLA claim form has been extended due to the current situation, but it is recommended to check with the Department for Work and Pensions that this extension still applies before relying on it
6. Council Tax Support/Reduction
Everyone who gets Council Tax Support/Reduction and is of working age will have their remaining liability reduced by a further £150 over the financial year. If their outstanding liability is equal to or less than £150 then they will not have to pay anything. You will not have to make an application, the process should be automatic.
7. Deductions from Benefits
Deductions from benefits to recover previous benefit and tax credit over-payments were suspended, but the suspension is ending and the DWP will write to claimants to let them know when deductions will resume. Advance payments of Universal Credit have continued to be recovered as usual.
8. Tax Credits
These will continue to be based on normal hours of work even if you have been affected by coronavirus and are working fewer hours. There is no need to notify HMRC. This modification will last while the Job Retention Schemes and Self Employment schemes are ongoing. However you do need to tell HMRC if you lose your job or stop trading.
9. Carer’s Allowance
Entitlement continues even if caring hours have stopped due to the carer or the cared for having coronavirus.
The government has said that mortgage payers will be able to get a three-month mortgage payment holiday. This will also apply to landlords whose tenants are experiencing financial difficulties because of coronavirus.
Applications can be made until 31 October 2020. When the three months has expired, lenders should consider granting a further three months’ holiday from mortgage payments.
No repossession proceedings by mortgage lenders should start or be continued until the end of October 2020.
Any notice to end certain tenancy types must allow at least 3 months between service and expiry. This extended period will apply until 30 September 2020. The court service has suspended all ongoing housing possession action until 23 August 2020.
From 19 March 2020, disconnection of credit meters is suspended. Customers not able to add credit to their pre-payment meters can speak to suppliers about options to keep them supplied. Options include nominating a third party for credit tops, getting a discretionary amount added to their credit or being sent a pre-loaded top up card.
Loans and Credit cards
Credit cards, store cards and catalogue credit
Up until 31st October 2020, customers in financial difficulties can ask for a three month payment freeze or to pay a nominal payment without suspension of their card. If customers have already been granted a three month pay freeze and are continuing to experience “temporary” difficulties in paying, the FCA expects firms “to continue to offer support”.
Customers can ask for a three-month freeze.
Up until 31 October, customers can ask for an overdraft of £500 for three months at no interest on their main personal current account.
Up until 31 October, a three month payment freeze should be provided to customers who can’t meet their commitments due to coronavirus. No steps should be taken to end the agreement or take the vehicle back.
High-cost short-term credit (including payday loans)
Providers are expected to provide a one month interest free payment freeze to customers in difficulties.
Other credit products including pawnbroking agreements
A three month payment freeze should be provided.
Bailiffs cannot take control of goods from residential premises or highways until 24 August 2020. Even after that date they cannot enter premises to take control of goods. Any certificate that was granted before 24 August is automatically extended by six months.
Overseas nationals who cannot return home due to the COVID-19 pandemic will be able to extend their visa until 31 July. This applies to anyone whose leave expired after the 24 January and who cannot leave the country because of travel restrictions or self-isolation. Anyone in this situation just needs to contact email CIH@homeoffice.gov.uk, to let them know their visa has expired and they will be issued with an extension. Also people can apply to switch routes, such as from Tier 4 (student) to Tier 2 (General Worker), whilst remaining in the UK.
In addition, it will now be possible to apply for a long term visa from within the UK.
Coronavirus and child benefit claims
If you can’t register a birth, you can still put in a claim for Child Benefit.
Grant available for those who’ve lost income as a result of Covid-19
The Covid-19 Crisis Fund has been set up to support people who have lost their income as a result of the coronavirus pandemic. The grant is for immediate basic household expenses.