Coronavirus Key Facts
Self Employed Workers
Self Employment Income Support Scheme (SEISS)
- Pays 80% of average profit from last 3 years. Paid by HMRC
- Payment due in June 2020
- . GOV info
- Be self-employed or a member of partnership;
- Have lost trading/partnership trading profits due to COVID-19;
- File a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will have an additional 4 weeks from the announcement to do so;
- Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021
- Have trading profits of less than £50,000 and more than half of your total income come from self-employment. This can be with reference to at least one of the following conditions:
- Your trading profits and total income in 2018/19
- Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.
- Cl can claim UC immediately to cover cash flow problems
- Not yet clear how the DWP will deal with the SEISS income but likely that a SEISS payment in June will be averaged across the months from March 2020, thus creating an overpayment of UC. CL should be ready to repay this
- Cls cannot apply for this scheme yet.
- HMRC will contact Cls if they are eligible and invite them to apply online.
Job Retention Scheme
- If employer is unable to pay Cl’s salary due to Covid-19, employer can apply for assistance from the Government.
- Employer can claim a grant of up to 80% of Cl’s salary, up to a cap of £2,500 per month.
- Payments can be backdated to 1st March to initially run for 3 months but may be extended.
- Cl will become ‘furloughed worker’ – still on the employer’s payroll; will retain statutory and contractual employment rights.
- If job still exists but Cl has caring responsibilities (eg child, at-risk adult) employer can also furlough the Cl.
- Cl cannot undertake work for this employer while furloughed (but can do training). Technically, Cl could work for a new employer (if work meets Covid-19 guidelines)
- The employer could choose to top up the salary to 100% but does not have to.
- Cl will be paid by the employer as normal. Income will be counted as “earned income” for benefits and deductions.
- Cl may also claim UC if eligible and JSA if income is less than around £80/week
- Cl must have been on employer’s PAYE payroll on 28 February 2020. Includes zero hours and temporary contracts
- For Cls with variable wages. Scheme will pay higher of a) what Cl earned in the same month last year; b) average of monthly earnings from the last year
- Can be furloughed by more than one employer (£2500 limit on each job)
- If eligible for contractual (earnings related) SMP etc, employer can claim for this also.
Statutory Sick Pay
- Sick Pay (£94.25) SSP should now be paid from day 1 (rather than day 4)
- Includes individuals who are caring for people in the same household and therefore have been advised to do a household quarantine.
- Must have been earning above the Lower Earnings Limit of £118 per week
- If Cl has symptoms, use NHS 111 online to get an “Isolation Note” to give to an employer or via the NHS website if they live with someone with the symptoms.
- Technically cannot be furloughed and claiming SSP at the same time
Admin and process changes
- No JC+ face to face meetings for 3 months (not clear how Identity checks will work)
- No PIP/ESA face to face assessments. Not clear is any pending claims will be allowed
- All reassessments and benefit reviews postponed for 3 months (April-June)
- If employed and on UC but working fewer hours due to Covid-19, note this on journal (to avoid hassle of not meeting the Claimant Commitment)
- Personal Allowances for UC and WTC increased by £20/week. Single person over 25 allowance increases from £317.82 in 2019/2020 to £409.89. This increase is not applied to JSA/ESA!
- For the Self Employed on UC, the “Minimum Income Floor” will not be applied during the outbreak (i.e UC will not assume a specific income).
New Style JSA and ESA
- Not means tested and thus independent of partner’s income and any savings
- Also paid with no waiting period and paid every two weeks which may help cash flow
- If Cl claims this and UC, then the JSA/ESA payments are 100% deducted from UC (ie not paid twice)
- Must meet the NI contribution requirements:
- Applies to the two tax years before the current benefit year (ie 2017/18 and 2018/19)
- Worked for at least 26 weeks earning more than the ‘the lower earnings limit’ in one of the two tax years
- Paid National Insurance on the equivalent of 50 weeks’ work at the ‘lower earnings limit’ during each of the two tax years
- For JSA must be Class 1 NI contributions (i.e PAYE); For ESA can be either class 1 or Class 2 NI contributions (ie PAYE or self employed)
- If claiming New Style ESA, no Fit Note required. Also payable from day 1 (no 7 day wait)
LHA (Local Housing Allowance
- Calculation now based on 30th rather than 25th percentile of rents – a significant increase. For one bedroom flat in Godalming, now £75 higher at £850/month. Use Gov link for latest LHA data
Council Tax Support
- Cls already receiving CT support will have a further £150 deducted from their 2020/21 bill
- Cls with reduced income can apply also
- If advisers have a question for Guildford Jobcentre they are picking up on 01483 442491 (not to be given to clients) and remain very helpful
- No changes at this time (domestic customers cannot be disconnected; Cls may be able to apply for Watersure)
DWP freezing repayment of benefit debt
- Suspending repayments of all overpayments and social fund loans. Deductions from benefits, direct debits and direct earnings deductions will stop automatically.
- If clients make repayments through a Standing Order or other voluntary method they need to cancel these.
- Not yet clear if applies to 3rd party deductions.
- Apparently does not apply to UC Advances.
Bailiffs step back (CIVEA and Marstons)
- Marstons has announced a freeze on enforcement action until further notice. CIVEA has made a similar announcement.
- Insolvency Service has closed phone lines and direct contact. Communication by email only
- DRO clients do not need to advise of a change in income due to increased UC, WTC and CT support payments
- Cls on DMP or IVA with an income drop
- Cls with a Debt Management Plan should contact their DMP provider and request a payment break or reduced payments. FCA rules require creditors to reassess payments when circumstances change.
- Clients with an IVA should speak to their insolvency practitioner (IP) or IVA firm. A ‘protocol compliant’ IVA, which most of our clients should have, allows for a payment break of up to 9 months or a reduction in payments of up to 15% without the need for a creditors meeting. (anything more would normally require a creditors meeting with a fee).
CPAG Debt Book now on-line
Local Support Groups