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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 regularly and more measures or changes 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 is running a Self Employed Income Support Scheme.

You can 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 first payment in May paid up to 80% of average monthly profit figure up to a maximum of £2,500 per month(maximum £7500 for the three month period). Applications for this first grant closed on 13th July 2020.

Applications for the second and final grant are now open. This second payment pays up to 70% of average monthly profit up to a maximum of £6570 in total.  The final date for an application is 19th October 2020.

Even if you didn’t make an application for the first grant you can still apply for the second one unless you are ineligible (see above).

The money does not have to be repaid but will be subject to Tax and National Insurance on Tax Returns and will affect means tested benefits like Universal Credit in the month in which you receive the payment and possibly the following month depending on how large the grant payment is.

Go to the the Self Employed Income Support Scheme section of the gov.uk website to check if you can claim. There is a form to fill in if you want to appeal against the decision that you are not eligible.

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.

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

You can make a claim for Universal Credit (UC).

At the moment self-employed people who are economically affected by the outbreak will not be subject to what is called the ‘Minimum Income Floor’. This means 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 UC. This would apply until you receive the Self Employed Income Support grant, if that scheme applies to you.  Please note that the Government will re-impose the ‘Minimum Income Floor’ for self- employed claims in the future and it is unclear at the moment when that will be. This will change your entitlement to UC but you should discuss this with your work coach if this starts to happen.

Please note, if and when you receive the Self Employed Income Support cash grant you will need to report this to UC when you receive it. This will be taken into account in the month in which you receive the grant and will be treated as income and will reduce your UC for that month, possibly to nil, and will affect the next month’s UC depending on how large the grant is and what your normal UC amount is. You do not have to reclaim UC in these circumstances but you should go back on to your UC journal.

Making a UC claim now

To make a claim for UC 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. Business assets are ignored. Any earnings of you or your partner will be taken into account in the assessment. UC is usually paid monthly in arrears and although there is a five week wait 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 apply for a Council Tax reduction from your local council

Check with your local council whether any other help is available to businesses affected by the pandemic.

There are also free school meals vouchers for certain claimants of UC.

Tax Issues

  • Self-assessment Income Tax payments will be deferred until January 2021.
  • VAT payments were deferred until the end of June 2020 and will be given to December 2020 to settle.
  • If you are finding it difficult to make payments you should discuss with HMRC to see if they can make a payment plan for you.

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 is running a Self Employed Income Support Scheme.

This consists of two cash grant payments one in May and one in August to those financially affected by the coronavirus.

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.

These payments are being made to 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. In addition you must receive most of your income from self- employment.

You can 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 first payment in May paid up to 80% of average monthly profit figure up to a maximum of £2,500 per month (maximum £7,500 for the three month period). Applications for this first grant closed on 13th July 2020.

Applications for the second and final grant are now open. This second payment pays up to 70% of average monthly profit up to a maximum of £6,570 in total. The final date for an application is 19th October 2020.

Even if you didn’t make an application for the first grant you can still apply for the second unless you are ineligible (see above).

The money does not have to be repaid but will be subject to Tax and National Insurance on Tax Returns and will affect means tested benefits like Universal Credit in the month in which you receive the payment and possibly the following month depending on how large the garnet payment is. Go to gov.uk to check if you can claim. There is a form to fill in if you want to appeal against the decision that you are not eligible.

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.

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 award(s). If you receive money from the Self Employed Income Scheme described above you will need to inform both the Tax Credits and Housing Benefit how much you receive as the money will be taken into account as income.

The complex rules of Tax Credits may mean that you may be better off making a claim for Universal Credit but check first (above on calculator).

At the moment self-employed people on UC who are economically affected by the outbreak will not be subject to what is called the ‘Minimum Income Floor’. This means 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 UC. This would apply until you receive the Self Employed Income Support grant, if that scheme applies to you. Please note that the Government will re-impose the ‘Minimum Income Floor’ for self- employed claims in the future and it is unclear at the moment when that will be. This will change your entitlement to UC but you should discuss this with your work coach if this starts to happen.

Please note when and if you receive the Self Employed Income Support cash grant you will need to report this to UC when you receive it. This will be taken into account in the month in which you receive the grant and will be treated as income and will reduce your UC for that month, possibly to nil, and will affect the next month’s UC depending on how large the grant is. You do not have to reclaim UC in these circumstances but you should go back to your UC journal.

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

Making a Claim for UC now

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. Business assets are ignored. Any earnings of you or 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 apply for a Council Tax reduction from your local council

Check with your local council whether any other help is available to businesses affected by the pandemic.

There are also free school meals vouchers for certain claimants of UC.

Tax Issues

  • Self-assessment Income Tax payments will be deferred until January 2021.
  • VAT payments were deferred until the end of June 2020 and will be given to December 2020 to settle.
  • If you are finding it difficult to make payments you should discuss with HMRC to see if they can make a payment plan for you.

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

Furloughed Workers

The Government has been running 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 is in grant form to employers and initially covered up to 80% of salaries up to a maximum of £2500 per month.

This is now being reduced month on month and the scheme will close on 31st October 2020. Since 1st August the scheme has become more flexible allowing employees to return to some paid hours of work with still some support from the Government, though reducing.

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. Once employees are no longer furloughed HMRC will continue to treat them as doing their usual reported hours for a further 8 weeks as long as they are still employed.  If during this eight week period their hours are permanently reduced or they cease undertaking any work the person will be treated as doing their usual reported hours (and therefore still meet the conditions for Tax Credits) for a further four weeks. Get advice if this happens to you.

You may be better off claiming UC if you need help with your rent and you are not currently claiming Housing Benefit. You may be better off claiming UC if you need help with your rent and you are not currently claiming Housing Benefit. But once you claim Universal Credit your Working Tax Credit, 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. As above, if you stop doing any work and you are currently on Working Tax Credit you will be treated as meeting the hours rule for a further four weeks. You may be able to claim Universal Credit at this stage but you need to get good advice. 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 UC if you are not currently claiming Housing Benefit. But once you claim Universal Credit your Working Tax Credit, Child Tax Credit and Housing Benefit will stop immediately and you will not be able to re-claim.

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

There are also free school meals vouchers for certain claimants of UC.

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

Please note those returning from abroad and having to quarantine cannot claim Statutory Sick Pay unless they have the symptoms of the coronavirus or have been in close contact with someone who has tested positive.

The Government 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 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 £120 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 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 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 UC.

I am self-employed or I am an employee with earnings less than £120 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

Please note those returning from abroad and having to quarantine cannot claim Statutory Sick Pay unless they have the symptoms of the coronavirus or have been in close contact with someone who has tested positive.

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  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 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 Housing Benefit 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 were deferred until the end of June 2020 and will be given to December 2020 to settle.
  • If you are having difficulty making these payments later this year contact HMRC to discuss a payment plan.

I am being made redundant. What am I entitled to?

If you have been working for the same employer for 2 years or more then you should be entitled to Statutory Redundancy Pay.

The amount you will get will depend on your age and how many years you have worked for the employer. It is capped at 20 years.

The amount is

  • Half week’s pay for each full year you were under 22.
  • One week’s pay for each full year from 22 to 41.
  • One and a half week’s pay for each full year 41 or older.

Those made redundant on or after 6th April 2020 will have weekly pay for this calculation capped at £538. This makes the maximum pay for statutory sick pay (20 year cap) of £16,140.

You will notice this is more than the £16,000 limit for some benefits. Please note redundancy pay for means tested benefits is treated as a capital item not income and will be added to any other savings/capital that you have. Payments that are made in the form of holiday pay or payments in lieu of notice are treated as income for means tested benefits.

Please note that if you reduce your capital resources in order to be entitled to means tested benefits the DWP will likely ask you what you have spent your resources on. They can also treat you as still having capital resources which you have deprived yourself of. If you spend any money on items such as replacement of furniture or other essential household items you need make sure you keep receipts and the expenditure is ‘reasonable.’

For more details about your redundancy rights see link above for Statutory Redundancy Pay and also check out the ACAS website.

Things to note

Jobcentre appointments were suspended for three months but Job Centres are now open and Work Coaches are gradually re-imposing claimant commitments and work search requirements. If you have any special reasons why you are not able to make your work commitments make sure you have informed your work coach (preferably through your online journal if on UC).

Changes are being announced regularly. Go to Turn2Us for the most up-to-date situation.