Coronavirus: How your Employment and Benefits are Affected

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Last updated - 20 April 2020

What benefits am I entitled to?

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If you’re struggling financially, it’s important to ensure you’re getting all of the income you’re entitled to. PayPlan's free online benefits calculator has been updated in line with the latest changes that have taken place in response to the Coronavirus outbreak – use this to check you’re claiming everything you can.

Before you get started: you will be asked about where you live, any benefits you currently receive, any disabilities you may have, your current employment status and your income and housing costs. Make sure you have your recent pay slips, bank statements and bills to hand.

How might Coronavirus affect my employment?

The Coronavirus outbreak has caused a lot of unrest amongst workers. Employees, self-employed workers – including those in the gig economy – and small business owners are feeling the effects of COVID-19. For full details on the Coronavirus pandemic, please visit the NHS website for more information.

The UK Government has advised people to self-isolate if they feel unwell and consumers are focused on stocking up on household essentials and home comforts. This means that workers in particular sectors are more at risk of losing their jobs due to lack of custom.

If you lose a job, you may be entitled to certain benefits to help you get through difficult times. Read on to find out who may be impacted by Coronavirus and what your rights are when it comes to benefits.

Whose employment is at risk due to Coronavirus?

Businesses may have to revaluate their outgoings (i.e. wages) due to income shocks caused by lack of trade during the Coronavirus pandemic, which may result in workers not being paid or being made redundant.

The government has announced that 80% of wages for all retained workers (up to £2,500 a month) will be paid for by grants for a minimum of three months. This should hopefully relieve the pressure on businesses to make redundancies.

Here’s a list of workers who may be affected by the Coronavirus and could benefit from the Government’s assistance:

  • If you are an employee of a struggling company or industry – like an airline or a restaurant
  • If you are self-employed, your income may take a sharp decline if customers are focusing their expenditures elsewhere or if businesses are reluctant to trade with you
  • If you work in a gig economy – like in fast food delivery or taxiing
  • If you are a small business owner with employees

How will the government protect my wages?

The UK government has just announced plans to amend the emergency Coronavirus bill to cover self-employed people for up to 80% of their net monthly earnings. The amount will be based on their earnings averaged over the last three years, or £2,500, whichever is lower; bringing the support for freelancers and the self-employed in-line with that offered to employees.

Previously the only assurance given to people who work for themselves was that they could claim £94.25 a week in Statutory Sick Pay, leaving many panicking over how they could cover their costs.

The government will also pay grants of up to 80% of the salary of workers. This may apply to you if your company keeps you on their payroll. This extraordinary payment will be worth up to a maximum of £2,500 per month. The government has said there won’t be a limit on the funding available and the payments will be backdated to the start of March. These payments will be open for three months initially and could be extended if necessary.

The government is also deferring the next quarter of VAT payments, which is the equivalent of injecting another £30bn into the economy and is designed to help companies stay afloat.

I’m a hospitality worker, what’s available for me?

There is a new grant available for hospitality workers. Hospitality Action is raising funds for its emergency Covid-19 grant scheme, providing emergency one-off grants to support eligible hospitality workers impacted by the Coronavirus.

The grant will be a one-off payment of £250 per household and you can access this through an application form on the Hospitality Action page.

Will Coronavirus affect my benefits?

If you are in full-time employment and need to take time off sick due to Coronavirus, you will be entitled to your employers’ standard sick leave and pay entitlements. However, you will need to get a sick note by calling the NHS 111 phone number.

Statutory Sick Pay (SSP) currently works out at £94.25 a week (£95.85 from April 2020) and is eligible from up to 28 weeks after the first payment date. To be eligible for SSP, you must be earning at least £118 a week. If you earn below this, you may be able to claim for Contributory Employment and Support Allowance (subject to National Insurance contributions) or Universal Credit.

If you are self-employed or working in a gig economy where you have paid PAYE, you’ll be able to claim for Universal Credit at a rate equivalent to Statutory Sick Pay for employees. You can find out more on the description of a self-employed worker on the GOVUK website.

If you are on benefits-only income, you should continue paying your bills as normal. If you lose your job, the amount you get paid in benefits will increase by £1,000 a year, as will the Working Tax Credit basic element. In addition to this, please follow Government guidelines and refrain from ‘stock piling’ on groceries, as this will affect both:

  • The amount of money you have leftover each month – you may be left with a deficit
  • Other people’s ability to get what they need – this includes all vulnerable groups and care workers

When should I look to claim benefits?

If you are eligible for benefits, you should seek to claim them straight away. Considering the Coronavirus pandemic, the Government has made funds more readily available and this can now be paid much sooner than before.

If you are unsure, please contact your local Citizens Advice centre and seek advice. Please bear in mind that they will be much busier than usual – as will many services – so there could be a longer waiting time to get through to an adviser.

To contact a Citizens Advice adviser, please call them for free using the following numbers between the hours of 8am to 6pm, Monday to Friday:

  • If you live in England: 0800 144 8444
  • If you live in Wales: 08000 241 220
  • If you live in Scotland: 0800 023 2581
  • If you would prefer to talk to an adviser online, please use the Citizens Advice chat service.

Important: This content is for guidance and educational purposes only and is generic in nature. Salary Finance Limited (trading as Neyber) does not offer regulated financial advice. Please seek independent financial advice.