How do I access benefits and services during the COVID-19 outbreak?

This page gives an overview of the benefit and income support measures announced so far by the government. Because the situation is changing rapidly, it will likely need to be amended frequently, so do check back here for updates.

Self-Employment Income Support Scheme (SEISS)

On 26 March, following sustained pressure from Prospect and other unions and self-employed groups, the Chancellor announced a new scheme to support the self-employed whose income has been impacted by the COVID-19 pandemic. The SEISS will provide a grant of up to 80% of profits, up to a maximum cap of £2,500 per month, for self-employed sole traders and partnerships.

Note that people working through personal service companies (PSCs) will not be eligible for support through this scheme, though if you work through a PSC and you pay yourself partly through PAYE you may be able to use the Coronavirus Job Retention Scheme (see below).

To be eligible for the scheme, you must have filed a tax return for the 2018/19 financial year as self-employed or a member of a partnership. If you have not yet filed, you will have four weeks from 26 March to file your return and qualify for the SEISS.

Additionally, to qualify for the SEISS your annual trading profits must be less than £50,000, and you must derive at least 50% of your income from self-employment. The determination of your trading profits will be with reference either to your profits in the 2018/19 year, or your average profits in the three years up to 2018/19.

If you are eligible for the scheme, you will be contacted by HMRC and there is no action for you to take at the moment in relation to the SEISS (other than filing a 2018/19 tax return if you have not yet done so). Importantly, the scheme is not expected to be ready to make payments until June 1, so many self-employed people will need to find alternative sources of support in the meantime.

If you are in need of immediate financial support, access to Universal Credit has been greatly improved for the self-employed, though amounts payable are small (see below for more detail). Additionally, some self-employed people may want to consider using the Coronavirus Business Interruption Loan scheme (see below).

Further information

Coronavirus Job Retention Scheme

On Friday 20 March, the Chancellor announced a new Coronavirus Job Retention Scheme (CJRS), designed to protect employment in the wake of the economic impacts of the Covid-19 pandemic.

The CJRS will be open to all UK businesses and will allow employers to reclaim up to 80% of the wage costs of ‘furloughed workers’ (i.e. workers that they can’t afford to pay because of the crisis), up to a cap per worker of £2,500 per month. Employers can choose to ‘top up’ this amount to cover the remainder of normal wages and salaries.

The scheme is initially intended to run for three months from March 2020, but could be extended.

This scheme will be administered by HMRC and will require employers to apply for it through a new online portal. A number of technical challenges mean that it is unlikely that the CJRS will be ready to administer payments before 30 April, though employers will be able to make backdated claims to the 1 March. In the meantime, the government is encouraging struggling firms to use the Coronavirus Business Interruption Loan scheme (see more details below) to cover short-term cash flow requirements.

Note that the onus is on employers to access the scheme, and there is no action for workers themselves to take. They can however encourage employers to use the scheme, especially if they are actively considering layoffs.

The CJRS is the largest wage support measure of its kind ever seen in the UK, and is certainly a very positive step towards supporting workers during this unprecedented crisis. Details about how the scheme will work in practice are still emerging, and Prospect will continue to monitor developments closely and lobby for improvements to the scheme where necessary.

Further information

Statutory sick pay (SSP)

The government has brought forward emergency legislation to change the rules on SSP. Previously, SSP was only payable from the fourth day of sickness to eligible employees; this has now been changed and SSP will be payable from day one during the Covid-19 pandemic. This will be applied retrospectively from 13 March.

Additionally, the changes make clear that anyone who is unable to work because they are following Public Health England guidance and self-isolating with possible Covid-19 symptoms are also eligible for SSP. The government is also encouraging employers to relax requirements to provide evidence of illness.

Businesses with fewer than 250 employees will be reimbursed by the government for the costs of providing up to two weeks of SSP for employees who are off sick because of Covid-19 (including those who are not sick but required to self-isolate).

To be eligible for SSP, it is still necessary to be an employee and earning more than £118 per week. The definition of employee in this case incorporates anyone paying Class 1 National Insurance Contributions, and would include agency workers. Most self-employed people would not qualify for it, but changes have been announced to Universal Credit (UC) for the self-employed to make it easier for them to claim UC if they are impacted by coronavirus (see below). Also note that people who are receiving Statutory Maternity Pay are not eligible for SSP.

SSP is paid at a rate of £94.25 a week for the number of normal working days an employee is off sick. The maximum entitlement is for 28 weeks of SSP, after which employees would have to apply for Universal Credit.

There has been widespread criticism, including from Prospect, of the measures that have been introduced. SSP is too low to support individuals and families who have lost other sources of income, and too many low paid workers are ineligible to receive it. We urgently need to see eligibility for SSP extended to cover those earning below £118 per week, and a substantial increase in the size of payments.

Further information

Changes to Universal Credit (UC) & Employment Support Allowance (ESA)

The Department for Work and Pensions (DWP) has announced changes to the regulations for Universal Credit and Employment Support Allowance.

New emergency regulations will allow people impacted by Covid-19 to be treated as having ‘Limited Capability to Work’ when applying for these benefits without having to provide medical evidence or have a work capability assessment. This covers people who are ill with Covid-19, who are required to isolate because of Covid-19, or who are caring for a child who is ill or required to isolate because of the virus.

The seven day waiting period before claiming for ESA has also been temporarily removed for those impacted by Covid-19, and the Limited Capability to Work assessment will also mean that for those in receipt of UC, there will be no requirement to prove they are actively searching for work.

New UC claimants will also be able to get an advance one-month payment at the time they apply, without the usual five week waiting period, and without having to attend a job centre. DWP have also announced that from 19 March existing UC claimants will not have to attend a job centre for at least three months, but will receive their benefits as normal.

The DWP have also announced that the Minimum Income Floor requirement (a minimum assumed level of income – see the links below for more information) will not apply for those self-employed UC claimants who are impacted by Covid-19. Additionally, from 6 April, the Minimum Income Floor requirements will be temporarily relaxed for all new UC claimants for the duration of the crisis (i.e. even if you are not sick or self-isolating). New self-employed claimants will not therefore need to attend job centres and prove they are self-employed, and this will greatly expand access to UC for these types of workers.

There have also been small increases in the value of these benefits, in addition to the annual uplifting that was due to come into effect in April. Both UC and Working Tax Credits will increase by £20 per month, on top of planned annual increases. A single UC claimant aged 25 or older will see their monthly payment increase from £317.82 to £409.89.

These measures should make it easier for workers who cannot claim SSP (such as self-employed freelancers) to get access to some form of support in the short-term. They will also make it much easier for self-employed workers to access UC for the first time.

Prospect has been clear that, as with the changes to SSP, these measures are insufficient, and do not provide enough support to hard-hit workers. For many self-employed people, for example, even if they are successful in getting access to UC and/or ESA quickly, the amounts are small and the loss of income will be substantial in many cases. Urgent improvements are needed in the size of benefit payments available, an expansion of the scope of those eligible to receive them, and a faster and simpler process for applying for them.

Further information

Housing support

The Chancellor has announced that banks will be offering up to three month mortgage payment holidays for people impacted by coronavirus. This also applies to buy-to-let landlord mortgages, as part of efforts to reduce pressure on renters. The mortgage holidays will be administered by individual banks and mortgage lenders.

Additionally, the Housing Secretary has announced a delay to all evictions for private and social renters while the COVID-19 crisis is ongoing, though as yet there have been no announcements on rental payment holidays. However, on Friday 20 March, the Chancellor announced an extra £1 billion for housing benefit, to increase the Local Housing Allowance to 30% of local market rents from April.

There is an urgent need for more extensive housing support, particularly for renters and the London Renters’ Union has called for a rent holiday, similar to that announced for mortgage holders.

Further information

Childcare for key workers

On 18 March, the Department for Education (DfE) announced that schools would be closing at the end of the day on Friday 20 March and would remain closed to most pupils during the crisis. The exception is for the children of key workers, who will be able to use schools as a source of free childcare to allow them to continue to work.

The list of key workers has now been published by the DfE, and includes workers in health, social care, transport, food distribution, national and local government, and utilities. The full list is available via the link below. The guidance from DfE states that if anyone in a household is on the critical workers list, then they can continue to send children to school (i.e. it is not necessary for both parents to be key workers).

For children currently receiving free school meals, schools will be providing either meals or vouchers for food from local supermarkets. It will be left to headteachers to decide the options most appropriate for their school.

Further information

Support for businesses

On 18 March, the Chancellor announced a package of measures to support businesses during the Covid-19 crisis. It is expected that further business support measures will be announced very shortly.

Some of the measures may be relevant for self-employed people, and include:

  • A new Coronavirus Business Interruption Scheme, administered by the British Business Bank, will be launched from 23 March, and will allow businesses with an annual turnover of less than £41 million to apply for a loan of up to £5 million. The government will guarantee 80% of the loan and pay the interest for the first 12 months.
  • Businesses that are eligible for small business rate relief or rural rate relief will be entitled to a one-off cash grant of £10,000, which will be administered by local authorities.
  • All UK businesses are now eligible for a deferral of VAT payments for three months from 20 of March to 30 of June.
  • Income Tax Self-Assessment payments that were due on 31 July will now be deferred until 31 January 2021.
  • The government has also announced that the changes to off payroll working for contractors in the private sector (IR35) that were due to come into effect in April, have been postponed for one year.
  • A £500 million Hardship Fund will also be distributed to local governments to provide additional support.

Details on the full range of measures that have been announced so far can be viewed via the link below.

The measures have been widely condemned as inadequate, given that most of the support is in the form of loans, and many businesses facing an uncertain future will be reluctant to take on more debt. This is especially true for very small businesses that have a limited capacity to service significant debt through normal business operations. There is an urgent need for more direct cash support to help prevent lay-offs and business failures.

Further information