As a result of the coronavirus pandemic, your workplace might have had to close temporarily with your employer placing you on furlough or you may be working from home with reduced hours. At an already stressful time, having a reduced income only adds to your worries, particularly when you have a mortgage to pay or are living in rented accommodation and need to pay your rent. To help relieve financial pressure during this lockdown period, the government has introduced different measures to provide support.
Coronavirus Job Retention Scheme
This scheme went live on 20th April. It helps employers who have been badly affected by the coronavirus crisis to retain their employees by placing them on temporary furlough. If you are now in this position, the government guarantees 80% of your monthly salary. This applies up to a monthly limit of £2,500. On this subsidised pay, the associated pension and National Insurance contributions are also paid.
Although this scheme has only recently gone live, it dates back to 1st March. It currently runs for 4 months from that date although the government has advised it can be extended if necessary. A minimum furlough period of 3 consecutive weeks applies to benefit from this scheme.
Are you eligible?
Provided you were employed on 19th March and on the PAYE payroll on or before this date, you are eligible. This is regardless of your employment contract, whether it’s a full-time, flexible, agency, part-time, or a zero-hour contract.
If you are still working for your employer, however, you are not eligible to receive payment under this scheme. This is the case even if you are working with reduced pay or for fewer hours.
When working for more than one employer, you can be furloughed for each job. You can also be furloughed in one job and receive the furloughed payment whilst working normally for another employer.
If you are not an employee but are paid via PAYE, you can also claim for this grant. You are eligible for this is you are an agency worker, a limb (b) worker, a salaried member of a Limited Liability Partnership (LLP), or an officeholder, which includes being a company director.
Furlough criteria for employees
You cannot do any work for your employer or any associated company during the furlough period to be eligible. The exception to this is if you are an apprentice. In this case, you can be furloughed but are allowed to continue with your training during the furlough period.
If you are unable to work because you have caring responsibilities, such as looking after your children, or you are shielding as per the public health guidelines, you can be furloughed.
Statutory Sick Pay (SSP)
If you cannot work due to illness or self-isolate in accordance with the government’s guidelines, you can claim SSP. You need to earn £120 per week (as of 6th April) to be eligible for this.
Regarding coronavirus cases, the payment is allowed from the first day it is claimed as opposed to the fourth day. This also applies to those who are taking shielding measures. This came into effect on 13th March and is set to continue for 8 months unless otherwise reviewed.
If you’re not eligible for SSP, there are other benefits you can consider, as detailed below.
Other benefits available
If you are working reduced hours or have lost your job as a result of the coronavirus pandemic, there are some benefits you can consider claiming to help boost your finances. These include Universal Credit, New Style Jobseeker’s Allowance (New Style JSA), New Style Employment and Support Allowance (New Style ESA) and Employment and Support Allowance (ESA).
Universal Credit
This is a means-tested benefit offered by the Department for Work & Pensions (DWP). It covers a wide range of eligibility criteria to help cover the costs of your basic living needs. To offer extra relief during the COVID-19 crisis, the government has increased the standard monthly rate for single people aged 25 or over, increased the payments for private renters and removed the criteria for a minimum income (this applies to self-employed claimants who have suffered from a reduced income).
Are you eligible?
You can consider claiming Universal Credit if the following criteria apply to you:
- You are aged 18 or over (exceptions do apply in some cases for 16/17-year-olds)
- You are under the state pension age (or your partner is)
- You reside in the UK
- You have a low income or are currently unemployed
- Your savings are less than £16,000 (including your partner’s savings)
- You have had a change in circumstances and are already receiving benefits that Universal Credit is set to replace, such as income support, working tax credit, housing benefit and child tax credit
Your eligibility for Universal Credit takes the household income into account, not just yours. Therefore, if your partner has high earnings, you might not be able to claim via this scheme.
Please be aware that if you are already receiving a means-tested benefit and apply for Universal Credit, the payments you normally receive will cease immediately in favour of Universal Credit and you cannot revert back to them. Check carefully first to decide whether it’s better to continue receiving your usual means-tested benefit, such as working tax credit.
How much you can claim
A standard monthly allowance is paid depending on your age and circumstances (single or in a couple):
- Under 25, single: £342.72
- 25 or over, single: £409.89
- Both under 25, in a couple: £488.59 (total per couple)
- Either person is 25 or over, in a couple: £594.04 (total per couple)
Extra help is also available via Universal Credit. This applies if you cannot work due to disability or sickness, are looking after children or have other caring duties. You can also receive help to pay your rent via Universal Credit. To help cover your mortgage payments, the scheme offers a loan called Support for Mortgage Interest (SMI). Rather than taking out this loan, you may prefer to consider taking a mortgage payment holiday.
How to apply for Universal Credit
As the demand increased for Universal Credit when this health crisis started, an online application facility now streamlines this process. To ensure a faster response, it’s important to submit your application online rather than contacting the DWP by telephone.
New Style Jobseeker’s Allowance (New Style JSA)
New Style JSA is a contribution-based benefit that is paid fortnightly. You can either apply for it on its own or combine it with Universal Credit.
Are you eligible?
You may be able to claim for this allowance if:
- You work less than 16 hours a week or are unemployed
- You have been employed within the last 2 to 3 years and have been credited with or have paid Class 1 National Insurance contributions
- You reside in the UK
When claiming this allowance, your capital and savings aren’t taken into account. Your partner’s income, capital and savings aren’t either. The amount you receive, however, can be affected by your earnings or pension payments received.
If you are unable to work due to disability or illness, you cannot claim via this scheme but might be able to claim New Style Employment and Support Allowance.
New Style Employment and Support Allowance (New Style ESA)
New Style ESA is another contribution-based benefit. Like New Style JSA, it is paid fortnightly and can either be claimed on its own or with Universal Credit.
Are you eligible?
You may be able to claim for this allowance if:
- Your ability to work is affected by disability or illness
- You have been employed within the last 2 to 3 years and have been credited with or have paid Class 1 or Class 2 National Insurance contributions
- You are unable to receive Statutory Sick Pay
The amount you can claim via New Style ESA is not affected by your savings or those of your partner. Most income isn’t taken into consideration (it doesn’t matter if your partner is working). A personal pension might affect how much you can claim.
Employment and Support Allowance (ESA)
If the amount you can work is affected by your health or a disability, you can claim ESA to help with your living costs.
Are you eligible?
You may be able to claim for this allowance if:
- The amount you work is affected by a health condition or disability
- You have been employed within the last 2 to 3 years and have been credited with or have paid Class 1 or Class 2 National Insurance contributions
- You are unable to receive Statutory Sick Pay
- You are working or currently unemployed
- You are under the state pension age
You cannot claim ESA if you already receive Statutory Sick Pay.
Working Tax Credit (WTC)
If you still receive WTC and haven’t switched to Universal Credit, you should receive a higher amount from now on. This is as a result of the government’s increased support to counteract the negative impact of the coronavirus crisis. As from 6th April, the standard working tax credit of £1,040 per year increased to £3,040 per year.
Council tax relief
The government has advised local councils to use the Hardship Fund to offer relief to residents on council tax bills. The level of support offered is determined by each council. Some, for example, are offering deferred payments while others a one-off reduction of £150 for this year’s bill. Some local councils are agreeing to non-payment of bills lower than £150 depending on individual circumstances. It’s worth checking with your local council to see if you are eligible for council tax relief.
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