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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 29th October 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, if someone in your household has a confirmed positive test and you are required to self isolate or because you have been contacted by track and trace and asked to self isolate. If you are self-isolating and unable to work, speak to your employer immediately. You may not however claim SSP if you are self isolating due to returning from another country and are following the 14 day quarantine rules.

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 job support 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. The government has introduced the Job Support Scheme (JSS) to replace the Furlough Scheme from the 1st November. Whilst the previous furlough scheme offered to pay 80% of gross salaries up to £2,500 per month, with the added option for employers to top up the salary of their employees, the Job Support Scheme requires that employees work at least one third of their hours, paid for by the employer, and an additional third is topped up by the government. Meaning an employee working 33% of their hours would bring home 66% of their wages each month. Employees can work more than 33% of their hours if the work is available. The aim of this scheme is to support viable jobs - that's jobs where employers have some reduced work for their employees to do with the intention of increasing the hours worked over time. Where the furlough scheme was intended to help businesses during a temporary shut down when there was no work to do. You can find up to date information here.

If your employer does intend to access the Coronavirus Job Support Scheme, they will discuss with you directly with at least 7 days notice before putting you onto the scheme. The government has said that they intend to have the scheme run for 6 months from November 1st 2020 until 31st April 2021.

The self-employment income support scheme

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, in the form of the Self-Employment Income Support Scheme. These taxable grants are available to businesses that have experienced a turn down in income because of either the national lockdown or ongoing local lockdown restrictions.

The first grant will cover a three month period from 1st November 2020 to 31st January 2021, covering 40% of average monthly trading profits paid out in one installment, and capped at £3,750 in total. The second grant will cover a three month period from 1st February 2021 to 31st March 2021, and the government has yet to announce the level of this second grant. Grants are taxable income and also subject to National Insurance contributions.

can find out more information on if your business might be eligible for these grants here.

Another 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
CMO & Take Control Author 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.