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Coronavirus: Protecting your income - your rights and government support

Coronavirus: Protecting your income - your rights and government support
Written by Inez Miedema
Published on 27th March 2020
Updated on 30th March 2020
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As a consequence of the coronavirus, many people have seen their income reduced or are very concerned that they might be made redundant. The UK government is communicating with businesses and employees on a daily basis to understand what they can do to help lower the financial pressure we all experience. Below are the things you need to know in terms of what your rights are and how to protect your income.

Important: This is a fast-changing situation. We will be updating this page with relevant information, as and when it’s available to us. Please send us an email via [email protected] if you can’t find the answer to your coronavirus-related questions in this guide (please note that we unfortunately won’t be able to respond to every email, but we will try our best).

Can’t work? Statutory Sick Pay now available from day one

If you’re currently at home and unable to work due to experiencing coronavirus related symptoms, you should know that Statutory Sick Pay (SSP) is being made available from day one instead of day four of sickness. This is available no matter if you’re forced self-isolating due to having a confirmed case of covid-19 or if you’re isolating as a precautionary measure. If you are self-isolating and unable to work, speak to your employer immediately.

There are some eligibility rules around receiving SSP, such as the need to earn on average at least £118 per week. The amount you could receive, if eligible, isn’t high at just £94 per week, but every little helps and your employer might be willing and able to top it up at their discretion.

Emergency legislation is being brought forward as we write this article and SSP will be backdated to March 13th 2020. The government is updating information around SSP as and when it comes available on gov.uk/statutory-sick-pay.

Check if you’re entitled to benefits

As part of government measures to help the UK protect their income, the Universal Credit standard allowance and working tax credit basic element will be increased by up to £1,040 a year for 12 months. The availability of this increase is both for new and existing claimants, and doesn’t discriminate between the employed, self-employed and job seekers. The exact amount you receive will depend on your household income and personal circumstances.

If you are currently receiving Universal Credit on the requirement that you look for a job, you should contact your work coach by phone or through the online journal ASAP. They understand that looking for a job, attending an interview at the jobcentre is hard- if not, impossible- due to the coronavirus and they’ll work with you to find a solution.

You can find more information on Universal Credit, check if you qualify and apply by visiting gov.uk/universal-credit. Next to the specific coronavirus related help made available, it’s key to check if there are other benefits or help you could qualify for.

Redundancy and government furlough scheme

We understand that current times are challenging, and you might be one of many people who are worried about losing their job or being at risk of redundancy. The UK government has realised this risk too, and is working hard to ensure that as few people as possible go through redundancy by offering to pay 80% of gross salaries up to £2,500 per month. Employers can, in addition, choose to pay the rest of the salary of their employees, but aren’t legally required to. These measures are known as the Furlough Scheme and you can find up to date information here.

If your employer does intend to access the Coronavirus Job Retention Scheme, they will discuss with you directly that you might become classified as a furloughed worker. This would mean that you can be paid a portion of your salary, but aren't allowed to do any work for the employer during the time you’re being put on furlough. The government has said that they intend to have the scheme run for at least 3 months from March 1, 2020- but longer if necessary.

Self-employed or freelance - claim employment support allowance

If you're employed or working as a freelancer, you have possibly seen the biggest impact of the coronavirus by seeing your income drop overnight. The government has made some help available, but is yet to release more information on the rights and coronavirus measures for self-employed. We advise you to keep a close eye on their website.

One of the measures that has been taken is to lower the minimum income floor for Universal Credit from 6 April 2020. This means that the self-employed are more likely to be able to access these and other benefits. The Employment Support Allowance- a benefit for those who are off work due to the coronavirus- has now been made easier for freelancers and self-employed people to access. It is an allowance you can access instead of Statutory Sick Pay. Unfortunately, it’s £20 less a week than SSP at £73 per week.

In addition the IR35 tax reforms have been delayed by a year. The reforms generally lead to tax bills going up for many self-employed people on an annual basis - this will now come into play in April 2021 instead. This does mean that private sector businesses in the UK became responsible for setting the tax status of any contract worker, which means that those people working for a private or public company on a contract basis will have to pay more tax.

Carry over your annual leave

If your annual leave year ends in April or May and you have canceled your Easter holiday plans due to the coronavirus, you may be able to carry unused statutory annual leave days over into the next 2 years. It’s up to you and your employer to agree when you’ll take your annual leave, as some might want to use some of the days to look after your now home-schooled children, whilst others want to save that time for after COVID-19.

Currently, full-time workers in the UK will be given a minimum of 28 days of holiday including Bank Holidays each year. Those days often have to be used within the annual leave year and failure to do so will result in you losing your holiday entitlement. The reason why many UK based employers don’t allow you to carry over unused holidays is that your boss could receive a fine from the government if they don’t stick to the rules around annual leave.

Coronavirus has led to many people not being able to take their annual leave. The government wants to avoid people losing their annual leave, which is why the Business Secretary announced that workers who haven’t taken their statutory leave entitlement will now be able to use those days over the next two years. In addition, this means that key workers, for example those in food and healthcare, can continue to help in the national effort against the virus.

Use your savings where possible

If you do find yourself in a situation where despite the above available help you cannot cover your monthly expenses by your current income, you should access your savings before considering borrowing money.

Most banks have loosened rules around accessing fixed savings in light of the corona pandemic. Generally you’d have to pay a penalty fee when accessing fixed-rate savings, but many banks have mentioned that they will waive these fees. Contact your savings provider for more information before you access the funds.

Inez Miedema
Written by
Inez Miedema
Finance writer at Choose Wisely

Inez came on board in the Summer of 2019. Her main focus has been helping as many people as possible find our website through online marketing, writing content and partnership deals. She boasts 6 years of FinTech experience with other brands and has an in-depth knowledge of our customers.