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 16 April 2020.

This update includes new guidance on:

  • Visa changes
  • Claiming Child Benefit if you’re unable to register a birth
  • Grant available for those who’ve lost income due to the pandemic
  • Change to the the date you need to have been registered on your employer’s payroll in order to be eligible for the Coronavirus Job Retention Scheme.

The Coronavirus Job Retention Scheme

The government has announced the Coronavirus Job Retention Scheme. This allows 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 80% of the employee’s regular wages, up to a maximum of £2,500 per month. The furlough period can be backdated to begin from as early as 1 March. Your employer will be able to top up your wages to their original amount, but will not have to do so.

The scheme is intended to be operational before the end of April.

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
  • 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
  • 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 – at the moment an employee has no right to require their employer to include them in the scheme.

Self-employment Income Support Scheme

This scheme will allow some self-employed people to claim a grant worth 80% of past trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.

You can apply 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 (if you haven’t already done this, you have until 23 April to do so)
  • 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 able to apply 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).

The first payments under the scheme are likely to be made in June. In the meantime, you may be able to apply for benefits such as Universal Credit or new style Employment Support Allowance.

You cannot apply for the scheme at this stage – you will be contacted by HMRC in due course and asked if you want to apply.

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 from 6 April.

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.

Benefit Updates

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, but further increases of £20 per week have now been made to Universal Credit and Working Tax Credit, applicable for the next twelve months.

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.

Read more about Universal Credit at gov.uk

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.

Read more about ESA at gov.uk

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 for the next twelve months, 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 been suspended for the next three months

5. Disability Benefits (including PIP and DLA) and Work Capability Assessments under UC and ESA

There will be no new reviews or reassessments across all benefits for three months.

Where awards are due to expire, end-dates will be extended so that claimants continue to receive financial support at their current rate

There will be no face to face assessments for the time being – if an assessment has already been scheduled, claimants will be contacted by the assessment provider to discuss how this will be taken forward.

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 overpayments will be suspended for three months. Advance payments of Universal Credit will continue to be recovered as usual.

Mortgages

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.

Evictions

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. From 27 March, the court service has suspended all ongoing housing possession action for an initial period of 90 days.

Energy Payments

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 from 9 April

Credit cards, store cards and catalogue credit

Customers in financial difficulties can ask for a three-month payment freeze or to pay a nominal payment without suspension of their card.

Personal loans

Customers can ask for a three-month freeze.

Arranged overdrafts

Customers can ask for an overdraft of £500 for three months at no interest on their main personal current account.

Visa changes

Visa nationals who cannot return home due to the COVID-19 pandemic will be able to extend their visa until 31st May. 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.

More information and support