State Aid for Individuals

by Faareen Ali

The government has responded to the Coronavirus Outbreak by implementing State Aid to financially preserve and support people, during these turbulent times. The most important task for us in amidst of uncertainty and crisis is to be aware of the different types of state aid available, the application process, and eligibility criteria. We sat down and analysed some of the benefits available, condensed guidelines offered by the government, and answered some questions relevant to the subject matter.   

Statutory Sick Pay (‘SSP’) for Employees
What is Statutory Sick Pay?

Statutory Sick Pay legally right entitles ’employees’ to 28 weeks off work and a fixed allowance of £95.85 if they are too unwell to work. The government guidelines provide that you will need to be an ‘employee’ who has conducted some work for your employer and be earning an average of £118 a week to qualify. An ‘employee’ is anyone working under an employment contract.

Due to the Pandemic, the government has fundamentally tweaked the existing provisions to include those in self-isolation, either because they’re suffering from Coronavirus, or following the government guidelines. The other modification made to the usual metric is that the entitlement will now start from day 1 of isolation or sickness, as opposed to day 4, if it is Coronavirus related, from 13 March 2020.     

You can  also access an isolation note via an online form by visiting NHS 111 which allows you to self-certify your sickness and replaces a ‘fit note’ if you are off due to Coronavirus. A fit note would usually be required by your employer if you are off for more than 7 days in a row. According to the government guidelines, an isolation note will also be accepted as evidence for anyone unable to attend the Job Centre.

How will I be paid?

Statutory Sick Pay will be paid into your bank account by your employer as periodically as your wages. This can be weekly, fortnightly or monthly. For any of you who are employed by more than one employer, you can claim SSP from all of them, concurrently.

NB: For employers, the Coronavirus Act 2020 makes provisions for reimbursement of any payments made to employees for Statutory Sick Pay, through a Rebate Scheme.

Who is exempt from applying?

If you are self-employed or have already received the maximum entitlement under Statutory Sick Pay of 28 weeks, you will not qualify, however, you can instead apply for Universal Credit, New Style Jobseekers Allowance or Contributory Employment Support Allowance.

How do I apply if I’m in self isolation?

You should tell your employer about your intention to claim as soon as possible, or by the allocated deadline if there is one, and get an isolation note from NHS 111 to hand in.

If your employer decides to not to pay you Statutory Sick Pay, or you do not agree with the amount they are paying you, you can question them and contact HMRC Statutory Payment Dispute Team on 03000 560 630.

Useful links:

https://www.gov.uk/statutory-sick-pay

https://www.gov.uk/statutory-sick-pay/eligibility

https://www.gov.uk/statutory-sick-pay/how-to-claim

Universal Credit (‘UC’); A guide for the unemployed, employed and self-employed

Universal Credit was brought in by Welfare Reform Act 2012 to replace six income-based social security benefits such as Working Tax Credit and Income Support, and aims to contribute towards the living costs of those who are out of work or in receipt of a low income .

The government previously applied a Universal Credit Minimum Income Floor (‘MIF’) which has been ceased temporarily to simplify the process.  A MIF is where the self-employed individuals were treated as if they were earning the National Minimum Wage for 35 hours a week, depending on their age group, which would in turn impact their eligibility. From 30 March 2020, no one is required to look for work either, which was previously a mandatory requirement. Below you will find answers to some common questions concerning Universal Credit.

How often will I receive my allowance?

Universal credit is paid on a monthly basis to help with living costs, but for those living in Scotland, you will receive your payment twice a month. The assessment process will involve DWP examining your actual earnings to determine the level of award available.

I’m self-employed, what will I need to prove to be eligible?

You will need to prove that you are ‘gainfully’ self-employed and that your trade or profession is your main occupation. It states within the government guidelines that “your occupation must be organised, developed, regular and have an expectation of profit”.

This can be proven through Corporation Tax Returns and Unique Tax Reference Number which is usually provided by HMRC, marketing materials, customer lists, business plan, or anything to demonstrate that your business is functional. Please contact your accountant to access this evidence ahead of your application, as it is obligatory in order to be successful.

What criteria applies if you are currently employed?

If you’re an employee and on a low income, you can claim Universal Credit. There is a requirement for you to be 18 or over but not beyond the State Pension age. It is clear according to the DWP guidelines that you and your partner must have £16,000 or less in savings, combined, which will be considered under ‘Household income’ even if one of you are not eligible for this benefit.

I’m 18 years old and currently in training or full-time education, can I apply?

The following eligibility criteria will need to be satisfied by anyone18 or over, and in full-time education:

  1. You live with your partner who is eligible for Universal Credit
  2. You have a child, either as a couple or as a single parent
  3. You have a disability and are entitled to Disability Living Allowance (DLA) or Personal Independence Payment (PIP) with a limited capability to work
  4. If you are 21, in full-time education, and without parental support or in the care of a local authority.
What are the exceptions for 16-17 year olds?

The benefit is primarily available for anyone aged 18+, however there are exceptions in place to allow certain 16-17 year olds to qualify: 

  1. You are a Carer for a severely disabled person      
  2. You are responsible for a child, either as a single parent, or with a couple who is also eligible for this benefit
  3. You have limited capability for work and awaiting a Work Capability Assessment to be conducted by DWP
  4. You are pregnant and there are less than 11 weeks before childbirth
  5. You have a child who is less than 15 weeks old
  6. You have no parental support or are in the care of a local authority. 
How much will I be paid?

There are different allowances for people depending on their age and circumstances. Please follow this link to see how much you can receive.

https://www.gov.uk/universal-credit/what-youll-get

How do I apply for Universal Credit?

You can make an application for Universal Credit by making an account online at https://www.universal-credit.service.gov.uk/register/account# or calling their helpline on 0800 328 5644.

Contributory Employment Support Allowance (CESA) 

Contributory Employment Support Allowance (‘CESA’) is a social security benefit based on National Insurance Contributions, available for those who do not quality for Statutory Sick Pay, and for the self-employed. Whilst your income and earnings do not impact your ability to obtain CESA, it will be considered to determine the level of remuneration you could be entitled to. There are certain points that need to be kept in mind. Below we have answered some key questions and highlighted areas which will be considered by the DWP, during the application process.

What is the eligibility criteria for Contributory Employment Support Allowance (CESA)?
  1. You need to have worked as an employee
  2. You need to have paid enough National Insurance Contributions in the last 2 or 3 years, or have enough National Insurance Credits. 
What are National Insurance Contributions?

National Insurance Contributions are paid into ‘UK National Insurance’ by employers and employees, which have gone onto fund the social security benefits for the unemployed, unwell and state pensions. Your record of contributions will be considered to determine your eligibility for certain benefits.

What are National Insurance Credits?

You will get National Insurance Credits if you have not been paying National Insurance contributions  either if you have been too unwell to work or if you have been unemployed.  Here is a guide on how many credits you could be entitled to https://www.gov.uk/national-insurance-credits/eligibility

Can I apply for CESA if I’m in receipt of Statutory Sick Pay (‘SSP’)?

You cannot get CESA if you’re getting SSP from your employer.  However, you can apply for it up to 3 months before your SSP ends. That way, you will start receiving CESA payments as soon as your SSP ends.

How do I apply?
  1. You will need to complete a NSESAF1 claim form or call 0800 328 5644 to have a copy sent in the post 
  2. You would usually need to attend an appointment at your local job centre, however due to Pandemic, this has been paused
  3. You will need to complete the following details:
  • Fit note (sometimes called ‘sick note’ or ‘doctor’s note’ or ‘isolation’ note)
  • Proof of your identity
  • Proof of address
  • Proof of any pensions you get
  • Proof of any health insurance payments.
Useful links:

https://www.gov.uk/guidance/new-style-employment-and-support-allowance

https://www.gov.uk/guidance/new-style-employment-and-support-allowance#eligibility

https://www.gov.uk/guidance/new-style-employment-and-support-allowance#how-to-claim

https://www.gov.uk/guidance/new-style-employment-and-support-allowance#what-you-need-to-bring-to-your-appointment

This article is intended for guidance only and must not be relied upon for specific advice.

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