Money worries and coronavirus
A look at the changes being made to available benefits, their usual processes and new emergency financial support schemes in the light of the Coronavirus pandemic.
This Benefits Blog covers the main benefits (and changes to the) and other financial support, that can help when income is affected by the Coronavirus measures. The aim is to be brief but to also touch on all the main points, so please bear with me. Further blogs will explore things in more detail and in particular situations.
It’s a changing picture with announcements of new measures expected, with further details emerging as changes roll out. So this blog will be regularly updated.
This blog does not cover the evolving guidance on self-isolation, social distancing and shielding the most vulnerable - please see Useful links and further reading at the end.
Maggie’s Benefit Advisors continue to be here for everyone with cancer and their family and friends - see how to get further help below
Benefits and other financial support
There are two main ways the Government offers financial support during the Coronavirus pandemic:
- the largely unchanged benefits system – but with important changes to: ease claim processes, add some extra cash support and reduce the need for face to face meetings
- new financial support schemes – such as the Job Retention Scheme for employees and the Self-employed Income Support Scheme equivalent. It is this form of emergency tax credit that the Government have gone for rather tna a more general emegency universal basic income that some had called for
People directly affected by cancer – whether receiving a diagnosis or stepping back from work as a carer - might already be claiming benefits on a long-term basis or be starting to do so. And their entitlements continue as before with the various different steps along the way through that year or so after diagnosis.
What is new is that others in your household may now need to join you in self-isolation, because of extra risks around Corona virus. Or regardless of your household situation, someone in the household may be affected by lay-offs or the drying up of self-employed work, during the general restrictions.
What benefits are available?
See the links below for suggested starting points in finding out more about benefits that might help you These can take you on to further Benefits Blogs, covering things in more detail and for particular groups These may be helpful even if your claims would not be directly linked to having cancer or being a carer.
Many people wrongly think that the benefits system only applies at the lowest incomes. So, they can mistakenly rule themselves out (e.g. because of savings or other income). However:
- most benefits are “non-means tested” - i.e. they can be paid regardless of savings and most (and sometimes all) other income
- others are “means-tested” – or “income-related” – so the amount that you get will be affected by savings and other income (including any partners). But even then, these benefits can apply at higher incomes than you might think – especially tax credits, Pension Credit and Universal Credit
If you are over pension age
There are very few changes linked to the Coronavirus. Once you have come of “pension age”, you are entitled to State Retirement Pension - and the too-often missed Pension Credit (PC) top up - both in sickness and in health
However, you may now be facing extra costs related to staying in, so this could be a good time to check that you are not missing out on money that you are entitled to:
- Age UK estimates that 50% of those entitled to Attendance Allowance (AA) don’t claim it. AA offers extra help regardless of any other income or savings, if you could reasonably do with a helping hand or an encouraging word to manage day to day activities. There is one coronavirus change in that where AA sometimes ask for a home vissit for a face to face assessment, this will no longer happen.
- Similarly, some 40% of those entitled to Pension Credit (PC) don’t claim. DWP research shows this is mainly due to people just not realising that they could be entitled. NB: there is no upper savings limit and PC can help further up the income scale than many imagine.
So, please get your entitlements checked. And particularly, do get advice if you live with a partner under pension age or are thinking of starting to claim as a couple.
If you are of “working age”
Benefits in “working age” are inevitably more complicated. There is a wider range of benefits according to why your earnings need topping up or to replace them if they have stopped. And each benefit comes with different eligibility criteria and assessments of health, work requirements and finances.
So, it can get to feel a little like a maze leading to people not knowing: they may be entitled to a benefit, which benefit to claim, how to navigate the processes , whether to just give up or what to do if they say no or pay less than you expected. Again, Maggie’s Benefit Advisers are still here to help people affected by cancer, so do find out more and do get advice if you get stuck.
Universal Credit choices
An added complication is that a big part of the system is changing. This involves just six of the 40 or so benefits, known as the “legacy benefit”. But these are rather an important half dozen for millions of people still receiving them and they are slowly due to merge into Universal Credit (UC). They include:
- the four main means tested benefits: Income Support, Income-related ESA, Income-based JSA and Housing Benefit (HB) ; and
- the two tax credits: - Working Tax Credit and Child Tax Credit
If you are not currently getting any of the legacy benefits, then things are simpler: you will claim Universal Credit (UC) for any means tested support instead.
However, it is more complicated if you are getting legacy benefits now, but find yourself in new circumstances. Many millions still receive these benefits, even if they will eventually move over to UC, so this can be a bigger issue than many commentators have realised. While your current "legacy benefits" can adjust to help with lower income, you cannot usually claim another - or switch between them - to get the most support that the "legacy benefits" could once have offered. It may be that the full amount of possible financial support might only come from switching over to Universal Credit (UC) now.
However, a switch now offers no protection against any losses between old and new sums and it is a permanent one. So, you need to look not just at any additional support UC can offer now, but also how UC compares with your current legacy benefits when things get back to normal. So:
- it may be that, as well as extra help now, UC could pay more in your usual circumstances and you may actually prefer the very different way UC works; or
- it may also be that, some short term extra UC support might come at a price, if you lose out longer term or find UC's ways don't work for you
People who claim Working Tax Credit - as self-employed or as workers with a disability - need to be especially cautious. As do those getting disability help or carers of disabled children. The pros and cons do vary and UC can be the best bet for many people. If in any doubt, do get advice before making a claim for UC; for once you do, there is no going back.
Which benefits support people affected by Coranavirus?
It is the “sickness benefits” that are the most immediately relevant. While usually for people who are off sick and too unwell to work, these benefits also have an historic role in helping people who may not be unwell in themselves, but do need to quarantine. It’s these provisions - only occasionally used in the past - that may now have a much greater role during the coronavirus pandemic.
Non-means tested "sickness benefits"
These are paid paid regardless of other income and savings:
- Statutory Sick Pay (SSP) – the legal minimum sick pay paid by an employer. Many work sick pay schemes will pay more than this or carry on paying for longer than SSP’s maximum of 28 weeks. SSP is paid at a flat rate of £94.25 rising to £95.85 from April 2020
- Contributory Employment and Support Allowance (C-ESA) is the alternative to SSP, paid by Jobcentre Plus to those who can’t get SSP: exempt employees, those whose SSP has timed out, the self-employed and others. You will need the right National Insurance (NI) record in recent years; but the self-employed may be able to fill gaps. It starts at a flat rate of £73.10 rising to £74.35 in April. But there are new top ups to match the SSP rate, but confusingly not paid within ESA . Your ESA might increase separately after 14 weeks - see below
- NB: For most new claims, this will be called New-style ESA which means it is C-ESA without its previous link to Income-related ESA. However, that does not mean that you have to claim UC nor switch any "legacy benefits to UC, just because you claim New style ESA
Means tested "sickness benefits"
Means tested supported can be paid either instead of SSP or ESA (e.g. if you can’t get SSP and don’t have the right NI record for ESA) or as a top up to them (e.g. if you don’t have much other income):
- Universal Credit (UC) now takes on this role, along with help for many other groups and for help with the rent. It uses the same sickness assessments and criteria as ESA, including when following Government advice on coronavirus. There is a financial assessment with any partner and children, so the answer to “How much UC will I get?” is “It varies…”
- Many people though will still be getting this help under "legacy benefit" e.g. Income-related ESA (for living costs) and Housing Benefit (HB) (to help pay any rent). And a very few can still start a new claim for these “legacy benefits”
NB: if you were working and getting Working Tax Credit you can continue to receive WTC for up to six months of being unwell/quarantined. HMRC accept that you are a worker temporarily off sick based on you receiving SSP, ESA or UC. You could then stay with WTC and claim New-style ESA and see an increase in any HB for rent to get support, without having to claim UC
What changes will I notice if I am getting benefits now?
You may have been getting benefits already – perhaps related to cancer – and these carry on. But you may notice the following changes:
- please prepare to be patient – all benefits are being affected as the DWP diverts staff to deal with nearly half a million new claims for Universal Credit in the last 10 days.
- for the next 3 months, all WCA and Personal Independence Payment (PIP) face to face assessments are suspended.
- such assessments follow a self-assessment form. - an ESA50 or UC50 questionnaire for "sickness benefits" and a PIP 2 How your disability affects you form for PIP.
- there should not be a need to complete an ESA/UC50 if you are self-isolating and many people with cancer only need to fill in just a few pages of those forms.
- however, most people claiming PIP do get sent the PIP2 to complete in full, but will now get up to three months to do so. Do get help and advice with this form, but the sooner it is in the sooner a decision. It is not clear if DWP might make more awards based on the form and other evidence, or whether they will stockpile forms, while they concentrate resources on safety net benefits.
- if you have any “work-related requirements” attached to benefits – many people with cancer and all carers won’t have any – then interviews about these will be by phone. The nature of any requirements may well change.
- the standard allowance within UC and the basic element within Working Tax Credit will increase by £20 for the next 12 months. This is the way ESA amounts will be topped up to match SSP rates.
What is different if I need to make a new claim for benefits?
If you are starting an entirely new benefits claim, then:
- again, please prepare to be patient – all benefits are being affected as the DWP diverts staff to deal with nearly half a million new claims for Universal Credit in the last 10 days.
- there may be a change in options in how to claim e.g. DWP now want people to claim ESA by phone rather than filling in the form. However you can still complete the form online, print it off and send it to your local Jobcentre Plus if you prefer or thats the only practical way.
- both UC and ESA require you to ring for an appointment where you verify your ID and agree an ESA or UC Claimant Commitment. You still need to ring to set this up, but the appointment will now be a telephone one.
- UC does not make a first payment for 5 weeks, but you can get an interest free loan – called an Advance Payment - to tide you over. You can now apply without visiting the now closed local Jobcentre Plus offices. There will still be a skeleton staff working in those offices.
Is there a difference if my new claim is because I am self-isolating?
Yes, specific adjustments have been made to help people afford to be able to self-isolate for 14 days, if you get the symptoms of Covid-19:
- Statutory Sick Pay (SSP) will now start from Day 1 of your absence rather than Day 4.
- small employers - with less than 250 employees - will be helped with the cost of these extra SSP claims by getting a full refund of the first 2 weeks SSP payments
- guidance to employers asks them to ease back on their usual evidence requirements after the first 7 days self-certification. If you go through the steps on NHS Online/Inform about whether you need to self-isolate, you can print off an “Isolation Note”
- similarly, Contributory ESA will start straightaway, rather than from day 8. So, those not entitled to SSP - e.g. the self-employed- can get immediate cover.
- there is no need to submit the usual GP’s Fitness for Work certificate (also known as “sick notes” or “sick lines”) for ESA or UC claims if you are self-isolating.
- ESA treats those making a claim as unwell until assessed. UC normally doesn’t, but leaves this to the UC work coach’s discretion. However, if the claim is linked to coronavirus, UC will treat you as unwell
What help is there with my housing costs?
If you are renting:
Benefits help for renters
- this comes from either Housing Benefit (HB) or Universal Credit (housing costs element) . You cannot usually start a claim for HB but if you have been getting some HB it can be increased. Otherwise you get that same help within UC
- restrictions on the maximum amounts payable for tenants in the private sector – called the Local Housing Allowance (LHA) - are being eased. LHA is being raised back to a point where it covers the lowest 30% of market rents in your area. This may greatly reduce the number of occasions when help from benefits falls short of the rent you have to pay.
- If you still have a rent shortfall – or if you are a social sector tenant struggling to pay the “bedroom tax” – you can still apply for a Discretionary Housing Payments (DHP) from the local council, to top up either HB or UC housing costs.
Landlords and tenancy changes
- the Government is offering extra help to landlords e.g. the mortgage holiday scheme, so that they have more ability to be flexible with tenants with rent difficulties
- legal changes mean that eviction for rent arrears cannot be started in the next 3 months . There will be an expectation of reaching agreements .
- social landlords - such as local councils or Housing Associations will not evict for rent arrears in the next six months.
- Do still talk to your landlords about financial difficulties to look at support to claim extra help to pay the rent and possible "rent holidays".
- Proceedings can continue in relation to other alleged breaches of your tenancy agreement
- NB: The Government closure of hotels does not apply if you live a hotel as temporary accommodation. Get advice if the hotel misunderstands what is expected of it.
If you are an owner occupier paying a mortgage:
- Talk to your lender about the Government backed mortgage holiday scheme, if you are going to struggle to make your usual payments.
- Do not just stop paying ur mortgage, but hold on until your "mortgage holiday" has been agreed; or you risk your credit rating and flexibility from your lender.
- This scheme allows you to miss mortgage payments for, though these will be added on at the end of your term. With the extra backing these should be easier to get, but lenders will explain the costs involved.
Help with the council tax
Not directly related to staying in your home but this bill is very closely connected to it
- check that you haven't been missing out on any non-means tested status discounts
- regardless of any other benefits you get or might claim now, help for council tax comes from Council Tax Support from your local council - open to everyone on a low income whether in work or not, employed or self employed
- schemes for older people in England and everyone in Wales and Scotland can potentially cover all your council tax
- extra funds are going to councils to help fund extra demand.
- if you do not qualify for this help do still talk to your council. While they need every penny of council tax income, they may be able to arrange a payments holiday
Help with utility bills
- If you rely on a prepayment meter, getting out to get a token or key may be difficult. Most providers are able to offer to send you one via the post
- if you are on a credit meter, you will not be cut off during this period, but do make contact with companies to agree an affordable payment that you can catch up on later.
What support is available longer term?
Many of the adjustments were announced to ease claims during 14-day self-isolations. However, the new measures don’t have a time limits on them, but rather they apply to claims when you are "following Government advice" So, if that advice is to join a partner going through chemo, in self-isolation for 12 weeks, then you would still be covered.
ESA will keep in contact to check the situation and whether that is still one where Government advice (as it stands at that time and in your circumstances) still applies. If not then your benefits may change.
If you receive ESA and or UC for over 14 weeks, you may qualify for an extra amount, called an ESA “component” or a UC “element. This might depend on any changes announced to eligibility, but this is a bridge not come to by anyone yet
What help is available if I am laid off as an employee?
If possible – depending on the nature of your work – the Government wants employers to be creative in finding ways of you carrying on working from home and so carry on being paid.
For some kinds of work that just isn’t possible. Key workers are still being asked to attend at their workplaces, but others are being asked to stay at home at least for the next 3 weeks. Some sectors are being shut down e.g. non-essential retail, leisure and hospitality.
If you are laid off the new Job Retention Scheme comes in. Initially, it lasts for the next 3 months, but it will be extended if necessary. The bare bones are that:
- employers will identify affected employees as “furloughed worker” and notify each employee accordingly
- they will submit information to HMRC about these employees through a new online portal
- HMRC will reimburse 80% of the wages that the employer pays to furloughed workers, up to a cap of £2,500 gross per month.
- those on “zero hours” contracts who are on the PAYE system, will be covered with the payments to employers from HMRC being based on the pattern of regular earnings
There are more details and work to get this up and running, but responsible employers are being expected to carry on paying as normal. Help with cash flow issues is available to them from the Coronavirus Business Interruption Scheme.
However, some employers don't see finding their 20% as possible . However, it is possible for an employer to not contribute their 20% - still leaving you with 80% salary. And for employers who have already let you go, to take you back on and make you a "furloughed employee" retrospectively. A lot of employers don't realise this, so it is worth referring them to the HMRC Guidance and asking them to bring you into the scheme..
What help is available for the self-employed?
There was a real gap until the equivalent of the Job Retention Scheme was announced on Friday 26th March. Extra difficulties relate to the complexity and big variation of self employed, who range from the very rich celebrity person to through many full time workers on the lowest incomes to people doing a little bit of self-employment as a small top up. Also lesscurrent records could create a fraud risk.
The Self-Employed Income Support Scheme
This is the equivalent of the Job Retention Scheme for employees. It will work as follows:
- you must earn more than half of your total income from self employment - based on either the 2018/19 tax return or the three years 2016 to 2019 (or both)
- you must have filed that 2018/19 tax return - if you are running very late you have up to 26th April 2020 to get it in. Fines are being waived.
- if your net profits are over £50,000 a year you are not eligible. Nor if you have only recently started and not covered by a 2018/19 tax return . In that case see benefits help below.
- you can potentially receive a taxable grant for 80% of your net profits based on either the 2018/9 year or an average of the three years 2016-19.
- It is not yet clear which figure applies if different or the effect on eligibility
- HMRC will contact eligible people with a simple online claim process with payments in June, backdated to March and monthly payments .
- Payments will be regardless of the actual %age impact on your business
Help from the benefits system
If you are a recent starter and not covered by the Income Support Scheme , then help is available from the benefits system, with some 1 year increases, particularly aimed as a top up for the self-employed, but benefiting all claimants:
- an extra £81.30 a month has been announced for Universal Credit (UC) standard allowances and an extra £1,040 a year on the basic element of Working Tax Credit , have been announced from 6th April 2020 throughout the April 2020/2021 year, as the way of topping up basic Contributory ESA rates by £20 a week so as to match SSP levels. NB: if you have been getting Working Tax credit, you don’t have to claim UC either just just to get that top up, nor just because you claim New-style ESA. Get advice before claiming UC if you have been getting tax credits
- if you have some earnings or ongoing payments, you may benefit particularly from the ways both ESA and UC can ignore some of this – see below.
- UC is suspending its Minimum Income Floor, which is when they assume you earn a certain amount even if your actual net profits are far less or amount to nothing. UC will now go with actual net profit in each month.
Other business help includes:
- loans via the Business Interruption Scheme.
- grants for small business depending on rateable values and suspension of business rates
- deferral of payments on accounts for Income tax, next due on 31st July 2020 to January 2021
- deferral of VAT, but most self-employed people have a turnover below the VAT threshold. .
Can I earn at all while claiming “sickness benefits”?
Yes, you can – at least while claiming ESA and UC for limited capability, but not in the case of SSP.
- for ESA earnings of less than £131.50 (rising to £140 in April) and for under 16 hours, are ignored entirely, but above that ESA stops for that week
- UC doesn’t put a set hours/earnings limit, but it will ignore some earnings – rather less than ESA will - and will not count the rest in full.
Changes in other help
Free school meals
These can be a vital part of financial support and family budgets when on a low income during term time. Education is a devlved issue so check the links for each of the home nations. Broadly:
- in England there will be vouchers issued worth £15 a week to be used at a growing range of participating schools
- in Scotland meals provision continues - as a take away - but see your local authority via the link to check on how this works in your area
- In Wales the intention is to set up a voucher scheme but in the short term it will be up to local autorities whether to do this via meal packs or cash payments
- In N. Ireland it will be by automatic BACS transfers into bank accounts.
The scheme - where you exchange your PIP or DLA Mobility for a car usually on a leasehold arrangement continues. The practical problem is that participating dealers are closed. If you have an existing arrangement that's coming up for renewal, then it will be extended for 6 months, but unfortunately it is not possible to start up a deal until dealerships reopen. See the link for Motability FAQs
Where can I get help and advice?
All advice agencies are adapting to the fact that "face to face" interviews are usually not possible within current guidelines. But they are there for you in other ways. Maggie’s Benefit Advisors are no exception and many of us are still here to help people affected by cancer, but just in different ways. You can continue to access Maggie's support - whether with benefit or in so many other ways - by:
- calling or emailing your local Maggie’s Centre ; or
- calling 0300 123 1801 or emailing: firstname.lastname@example.org ; or
- checking out benefits support available within the Online community . To get the most out of it please register for free
- read through our cancer support pages on our website.
Maggie’s support – including Benefits Advice - is still very much here for you – but just not face to face in our Centres for the time being
Links and further reading
Useful links within the Online community:
- join the Conversation linked to this blog
- HMRC "80% of income" coronavirus support schemes - for more detail on help for "furloughed" employees and the self employed
- look at other coranavirus information and support on our Coronavirus Blogs page
- Find out more about: Benefits after a cancer diagnosis
- Find out more about: Extra help with day to day living costs and getting around
- View the full range of Finance and benefit blogs
- Check out where you can get Benefits advice from Maggie's
For reliable information and up to date guidance on coronavirus
- NHS Direct England, NHS Direct Wales, Galw Iechyd Cymru , NHS Inform (in Scotland)
- BBC information on Corona virus
- The Guardian information on coronavirus
For more information on benefits and support in this blog
- Martin Lewis - MoneySavingExpert.com - Guide to Coronavirus Financial Help and Rights
- details of the Budget 2020 including measures on benefits and coronavirus
- details of the suspension of face to face assessment for ESA, UC and PIP
- Details of the new Job Retention Scheme - to cover 80% of the wages for "furloughed" employees
- Details of the Self-employment Income Support Scheme - a similar scheme for the self-employed
- Why did it take longer to sort out a scheme for the self employed?
- Shelter: Housing Advice: coronavirus (Covid-19)
- Calls for an emergency basic income
- Further recommendations for change by the Disability Benefits Consortium
- Motability and Covi19 restrictions
- Arrangements in place of free school meals in England, Scotland, Wales and N.Ireland