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Financial support for those affected by coronavirus

We appreciate that many of our residents will feel a financial impact from the coronavirus outbreak. Here you can find some questions and answers which may help.

The information cannot cover every eventuality, but seeks to provide an overview of the support available if you are affected either:

  • financially, by loss or reduction of earnings; or
  • through having to self-isolate.

The Government is making announcements daily and more measures may be announced soon.

I am self-employed and not claiming any benefits at all at present. My income has dropped drastically as a result of the coronavirus outbreak. I am not ill or self-isolating.

The Government has just announced the Self Employed Income Support Scheme.

This will be set up by HMRC during the next month or so and will make a lump sum payment in June for the past three months (March-May).

You cannot apply for this scheme. HMRC will contact the self -employed who will be affected by this scheme direct and invite you to apply.

It will be a ‘cash grant’. This will be for those with a net profit figure on average of £50,000 or less over the last three trading years. That is 2016-17, 2017-18, 2018-19. If you have been trading for less time but have made at least one Tax Return HMRC will use that information.

Those who have not put in a Tax Return for the financial year 2018-19 are not eligible but have four weeks to make this return and still potentially qualify.

You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

The scheme will pay up to 80% of average monthly profit figure up to a maximum of £2,500 per month.

Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.

At this point we don’t know if this scheme will be extended.

What about benefits in the meantime, or if I am not eligible for the scheme?

You can make a claim for Universal Credit.

The Government has just announced that self-employed people who are economically affected by the outbreak will not be subject to what is called the ‘Minimum Income Floor’. You will be treated as having the income you actually are receiving which may be NIL. In this case you will be entitled to maximum Universal Credit. This would apply until you receive the Self Employed Income Support grant in June, if that scheme applies to you.

Please note when and if you receive the Self Employed Income Support cash grant you will need to report this to Universal Credit when you receive it the grant. We don’t know exactly how it will be treated at the moment but current Universal Credit rules would treat it as a payment in the month in which it is made and depending on the amount of the grant this could mean that for the UC month you receive the grant that you will have an entitlement of NIL UC. You would then need to go back onto your UC account and apply (it’s a short form) for the next month and again some of the grant may be taken into account in the following month depending on how large the cash grant payment from HMRC is.

Making a UC claim now

To make a claim for Universal Credit now, you and any partner you live with, need to have £16,000 or less in savings. Those with savings of £6K to £16K will have a reduction in the amount paid. Any earnings of your partner will be taken into account in the assessment. It is usually paid monthly in arrears and although there is a five week wait but you can apply for an advance – see below.

You can request more frequent payments in certain circumstances.

Rent will be included in Universal Credit as well as amounts for your children. If you are a social housing tenant there may be a reduction if you are considered to have too many bedrooms. If you are a private tenant then the amount payable will be capped to the Local Housing Allowance. Deductions are usually made for people living with you who are adults, for example, adult sons and daughters.

Check out how much you may be entitled to using a benefits calculator.

Once your claim is accepted you can apply for an advance payment and although this is a loan which is repayable over 12 months it means you can get access to some money. You can also ask for a payment holiday from repaying this loan for up to three months.

Make sure you also apply for Council Tax reduction from your local council.

Also look at free school meals vouchers, available for certain claimants of Universal Credit.

Tax Issues

  • Self -assessment Income Tax payments will be deferred until January 2021.
  • VAT payments are deferred until the end of June 2020 and will be given to December 2020 to settle.

I am self-employed and currently claiming Tax Credits and/or Housing Benefit. My income has dropped drastically as a result of the coronavirus outbreak

The Government has just announced the Self Employed Income Support Scheme.

This will be set up by HMRC during the next month or so and will make a lump sum payment in June for the past three months (March-May).

You cannot apply for this scheme. HMRC will contact the self -employed who will be affected by this scheme direct and invite you to apply.

It will be a ‘cash grant’. This will be for those with a net profit figure on average of £50,000 or less over the last three trading years. That is 2016-17, 2017-18, 2018-19. If you have been trading for less time but have made at least one Tax Return HMRC will use that information.

Those who have not put in a Tax Return for the financial year 2018-19 are not eligible but have four weeks to make this return and still potentially qualify.

You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

The scheme will pay up to 80% of average monthly profit figure up to a maximum of £2,500 per month.

Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.

At this point we don’t know if this scheme will be extended.

What about benefits in the meantime, or if I am not eligible for the scheme?

You have two options here and you need to check whether you are better off staying on these benefits or making a claim for Universal Credit.

Check out how much you may be entitled to using a benefits calculator.

If you are better off and can stay on Tax Credits and Housing Benefit you need to inform both HMRC and your local Housing Benefit department about the drop in your income. Both departments can reassess your earnings and your awards.

The complex rules of Tax Credits may mean that you will be better off if you make a claim for Universal Credit. However check first, using the calculator linked to above.

The Government has just announced that self-employed people who are economically affected by the outbreak will not be subject to what is called the ‘Minimum Income Floor’ in this benefit and will be treated as having the income you actually are receiving which may be NIL. In this case you will be entitled to maximum Universal Credit.

Once you have moved onto Universal Credit you cannot move back to your old benefits.

Making a UC claim now

To make a claim for Universal Credit now, you and any partner you live with, need to have £16,000 or less in savings. Those with savings of £6K to £16K will have a reduction in the amount paid. Any earnings of your partner will be taken into account in the assessment. It is usually paid monthly in arrears and although there is a five week wait but you can apply for an advance – see below.

You can request more frequent payments in certain circumstances.

Rent will be included in Universal Credit as well as amounts for your children. If you are a social housing tenant there may be a reduction if you are considered to have too many bedrooms. If you are a private tenant then the amount payable will be capped to the Local Housing Allowance. Deductions are usually made for people living with you who are adults, for example, adult sons and daughters.

Check out how much you may be entitled to using a benefits calculator.

Once your claim is accepted you can apply for an advance payment and although this is a loan which is repayable over 12 months it means you can get access to some money. You can also ask for a payment holiday from repaying this loan for up to three months.

Make sure you also apply for Council Tax reduction from your local council.

Also look at free school meals vouchers, available for certain claimants of Universal Credit.

Tax Issues

  • Self -assessment Income Tax payments will be deferred until January 2021.
  • VAT payments are deferred until the end of June 2020 and will be given to December 2020 to settle.

I am employed as an employee or recently employed and I have had an income reduction

Furloughed Workers

The Government has just announced a package of support called the Job Retention Scheme’ for employers to continue to pay their employees if their business is in difficulties because of the outbreak. This will be in grant form to employers and will cover up to 80% of salaries up to a maximum of £2500 per month. This can be put in place for people who were on the payroll on 29th February 2020. Employers have to nominate workers to be ‘furloughed’- effectively they are on absence of leave and cannot work for the employer.

The amount that will be payable can be made up by your employer to the full amount but they don’t have to do this.

As a ‘furloughed worker’ if you are claiming Working Tax Credit, HMRC will treat you as continuing to work your normal hours for at least 8 weeks. We are unclear what will happen after 8 weeks. If you are also already claiming Housing Benefit make sure you inform your local council about your change in income.

You may be better off claiming Universal Credit if you need help with your rent and you are not currently claiming Housing Benefit.

However, once you claim Universal Credit your Working Tax Credit and Child Tax Credit and Housing Benefit will stop immediately and you will not be able to re-claim.

Non-Furloughed Workers

If your income has reduced and you are currently claiming Working Tax Credit, if your hours are reduced, HMRC can treat you as doing your normal hours for 8 weeks. If it is a permanent reduction in your hours then this may mean that you lose entitlement to Working Tax Credit after 8 weeks because you need to work a certain number of hours or be treated as working a certain number of hours to qualify. If you are claiming Housing Benefit inform your local council of your reduction in income.

If you need help with your rent you may be better of claiming Universal Credit if you are not currently claiming Housing Benefit BUT once you claim Universal Credit your Working Tax Credit and Child Tax Credit and Housing Benefit (if you are claiming them will stop immediately and you will not be able to re-claim.

Make sure you also apply for Council Tax reduction from your local council.

Also look at free school meals vouchers, available for certain claimants of Universal Credit.

I have already lost my job and my employer is not going to keep me on. This may also include those working in gig economy or zero hours contracts if not treated as self-employed

In most circumstances you will need to claim Universal Credit. If you have been paying Class one National Insurance Contributions and depending on your contribution history you may be able to claim Jobseekers Allowance (New Style) for six months. This may be useful if you have a partner who is working and together you earn too much to claim Universal Credit.

If you are already claiming Housing Benefit and /or Tax Credits check the situation of whether it is better to stay on these benefits or claim Universal Credit on the calculator below. Once you have moved onto Universal Credit you cannot go back on your old benefits.

Check out how much you may be entitled to using a benefits calculator.

To make a claim for Universal Credit, you and any partner you live with, need to have £16,000 or less in savings. Those with savings of £6K to £16K will have a reduction in the amount paid. Earnings of your partner (if any) will be taken into account. It is usually paid monthly in arrears and although there is a five week wait but you can apply for an advance – see below.

You can request more frequent payments in certain circumstances.

Rent will be included in Universal Credit as well as amounts for your children. If you are a social housing tenant there may be a reduction if you are considered to have too many bedrooms. If you are a private tenant then the amount payable will be capped to the Local Housing Allowance. Deductions are usually made for people living with you who are adults, for example adult sons and daughters

Once your Universal Credit claim is accepted you can apply for an apply for an advance payment. Although this is a loan which is repayable over 12 months it means you can get access to some money.  You can also ask for a payment holiday from repaying this loan for up to three months.

Make sure you also apply for Council Tax reduction from your local council.

Also look at free school meals vouchers, available for certain claimants of Universal Credit.

I am working as an employee but I am self-isolating because of one the the following reasons:

  • I have coronavirus (confirmed)
  • I have coronavirus symptoms
  • Someone I live with has coronavirus symptoms
  • I have been told to self-isolate by my doctor or by NHS

The Government has just launched an online isolation note for proof for your employer. To access an isolation note go to NHS 111 where you will be asked a series of questions. You will need an e-mail address to get this isolation note which you can give to your employer. The e-mail address can be a friend’s one if you haven’t got an e-mail address yourself.

As an employee your contract of employment may give you rights to your normal wages for a certain period of time. As a very minimum most employees should be able to claim Statutory Sick Pay.This can be paid from day 1 of sickness.  This is £95.85 (from 6th April) per week and is paid to you by your employer. The employees who will not be entitled to Statutory Sick Pay are those earnings less than £118 per week (see below if this applies to you).

These people are not able to claim Statutory Sick Pay but if they have sufficient National Insurance contributions may be able to claim Employment and Support Allowance (New Style). This is £58.90 (from 6th April) per week if you are under 25 and £74.35 per week if you are 25 or over. It is paid fortnightly in arrears. This is payable from day 1 of self-isolation.

If Statutory Sick Pay/ Employment and Support Allowance New Style is all you have to live on, you can also make a claim for Universal Credit for help with your rent.  If you are a social housing tenant there may be a reduction if you are considered to have too many bedrooms. If you are a private tenant then the amount payable will be capped to the Local Housing Allowance.  Deductions are usually made for people living with you who are adults, for example, adult sons and daughters.

To make a claim for Universal Credit you and any partner you live with need to have £16,000 or less in savings. Those with savings of £6K to £16K will have a reduction in the amount paid. Any earnings of your partner will be taken into account in the assessment. It is usually paid monthly in arrears and although there is a five week wait but you can apply for an advance – see below.

Once your Universal Credit claim is accepted you can apply for an apply for an advance payment. Although this is a loan which is repayable over 12 months it means you can get access to some money. You can also ask for a payment holiday from repaying this loan for up to three months..

If you are already claiming Tax Credits and/or Housing Benefit just check the calculator to see if you are better off claiming Universal Credit.

Check out how much you may be entitled to using a benefits calculator.

Make sure you also apply for Council Tax reduction from your local council.

Also look at free school meals vouchers, available for certain claimants of Universal Credit.

I am self-employed or I am an employee with earnings less than £118 per week but I am self-isolating because of one of the following reasons:

  • I have coronavirus (confirmed)
  • I have coronavirus symptoms
  • Someone I live with has coronavirus symptoms
  • I have been told to self-isolate by my doctor or by NHS 111

These people are not able to claim Statutory Sick Pay, but if they have sufficient National Insurance contributions may be able to claim Employment and Support Allowance (New Style). This is £58.90 (from 6th April) per week if you are under 25 and £74.35 per week if you are 25 or over. It is paid fortnightly in arrears. This is payable from day 1 of self-isolation.

If this is all you have to live on you can also make a claim for Universal Credit for help with your rent and costs for children. If you are a social housing tenant there may be a reduction if you are considered to have too many bedrooms. If you are a private tenant then the amount payable will be capped to the Local Housing Allowance. Deductions are usually made for people living with you who are adults, for example adult sons and daughters

To make a claim for Universal Credit you and any partner you live with need to have £16,000 or less in savings. Those with savings of £6K to £16K will have a reduction in the amount paid. Any earnings of your partner will be taken into account in the assessment. It is usually paid monthly in arrears.

Once your Universal Credit claim is accepted you can apply for an apply for an advance payment. Although this is a loan which is repayable over 12 months it means you can get access to some money. You can also ask for a payment holiday from repaying this loan for up to three months.

If you are already claiming Tax Credits and/or Housing Benefit just check the calculator to see if you are better off claiming Universal Credit. If it looks as if you are better off staying on Tax Credits and/or Housing Benefit make sure you inform HMRC and your council HB department about your change in income.

Check out how much you may be entitled to using a benefits calculator.

Make sure you also apply for Council Tax reduction from your local council.

Also look at free school meals vouchers, available for certain claimants of Universal Credit.

Tax Issues

  • Self -assessment Income Tax payments will be deferred until January 2021.
  • VAT payments are deferred until the end of June 2020 and will be given to December 2020 to settle.

Things to Note

Jobcentre appointments are suspended for three months but if you need to go to Jobcentre Plus it will still be open.

The requirement to look for work for both New Style Jobseekers Allowance and Universal Credit will not be imposed for a period of three months from 30th March 2020.

The personal allowance for Universal Credit will be increased by £1000 per year to bring it in line with Statutory Sick Pay for all claimants.

The basic element of Working Tax Credit will be increased by £1000 per year.

These increases apply from 6th April 2020.

The Self-employed Income Support Scheme for some self-employed people has been announced- details above.

Changes are being announced very rapidly at the moment so, the advice above is current as of 1st April 2020.

Go to Turn2Us for the most up-to-date situation.