Coronavirus: Employees: illness or self-isolation
The coronavirus (COVID-19) outbreak is having far-reaching financial impacts on individuals and businesses across the UK, and indeed across the world.
If you are an employee and are ill or self-isolating, this page explains what you may be able to claim. If you find your work has changed, for example your hours have been reduced or your have been laid-off or made redundant, see our work changes guidance. There is also some useful information on the ACAS website.
Can I get Statutory Sick Pay (SSP)?
Statutory Sick Pay is to be paid from the first day of sickness absence, rather than the fourth day, for people who have COVID-19 or have to self-isolate, in line with official guidance. There is also guidance on social distancing aimed at people aged 70 or older, under 70 with underlying health conditions and those who are pregnant and guidance on shielding for 12 weeks for those defined on medical grounds as extremely vulnerable. It is not clear at the current time whether people who fall into the social distancing/shielding groups are entitled to SSP.
In the Budget, the Chancellor set out a package to widen the scope of SSP with the aim of making it more accessible, for example that employees will be able to get any evidence they need from an NHS 111 online facility.
SSP is available for people who are paid under the Pay As You Earn system and who earn at or above £118 per week (increasing to £120 a week from 6 April 2020). The earnings taken into account are the average weekly earnings for the prior eight weeks. If you have more than one job, you cannot combine earnings from them to meet this threshold. This includes casual, zero-hour contract and agency workers (although the period which you may get SSP might be different). People who earn less than £118 (£120 from 6 April) per week or those treated as self-employed for tax purposes by their engager are not entitled to SSP.
Where you have not yet been in the employment for 8 weeks, SSP is worked out by reference to the amount of pay you are due to be paid under your employment contract. Zero hours contract workers who have not yet done any work under their contract, will need to claim welfare benefits (see below). There is some information about SSP and different types of employment on the GOV.UK website.
We are aware of some confusion around SSP entitlement. It is important to clarify that SSP is not a ‘worker’ employment law right but rather one that is tied to whether Class 1 National insurance is paid. This means that agency workers and zero hours contract workers who pay their tax and NIC under PAYE may qualify, whereas those in self-employment (even if it is 'dependent' self-employment) won’t, as they don't pay Class 1 NIC.
More generally, we would like to highlight that there is a lot of well-meaning but incorrect information about Statutory Sick Pay on the internet. It is important that you use trusted sources to confirm your position. For, more information see our press release: Tax experts try to clear up Statutory Sick Pay misinformation.
What happens to my tax credits if I claim SSP?
Claimants are treated as in qualifying remunerative work during certain periods of sick leave if they are in receipt of:
- statutory sick pay
- short term lower rate incapacity benefit
- income support on the grounds of incapacity for work
- employment and support allowance
- national insurance credits on the grounds of incapacity or limited capability for work
The last three bullet points are time limited to 28 weeks.
You should also be aware that if you do claim SSP (or new-style ESA - see below), it will count as income for tax credit purposes. There is no requirement to report changes to income to HMRC when they happen, but if you do not then you may be overpaid if your income increases or you may miss out on additional credits if your income falls.
If you aren't entitled to SSP and your employer or the business you work does not have any other arrangements in place, you may need to access financial support through the benefits system – in particular, ‘new style’ Employment and Support Allowance (the new name for contributory ESA) and/or universal credit (UC). In a small number of cases – broadly where you get or were entitled to the severe disability premium in certain benefits - you may still be able to claim income-related employment and support allowance (as well as other benefits UC is replacing) instead of UC.
Which you claim depends on whether you have paid enough NIC to claim new style ESA (more on this below). Even if you have, you may want to claim UC in addition, to top-up your income.
UC is gradually replacing six other benefits: working tax credit, child tax credit, housing benefit, income support, income-related employment and support allowance and income-based jobseeker’s allowance. The majority of people can no longer make claims to these other benefits, although there are two exceptions. Instead, if you need financial support you will need to claim UC.
You should also be aware of the following:
- If you or your partner get or have recently received a severe disability premium in certain benefits or are classed as a ‘frontier worker’ you may be able to make a claim for one of the benefits that UC is replacing. See our information in the main part of our website. This is complex and you should seek advice BEFORE making any UC claim if you think this might apply to you.
- If you are currently receiving any of the benefits UC is replacing, they will end when you make a UC claim
- UC takes into savings and your partner’s circumstances and income. If their income is too high, you may not qualify for any help.
- If your partner receives contribution-based ESA – which was the old name for new-style ESA – you may be able to ask for it to be re-assessed to include an income-based element to top-up your income instead of claiming UC. If you are in this situation, you should seek advice.
The benefits system is complicated. If any of the points above apply or you are unsure, you should seek specialist welfare rights advice before making any UC claim.
In the Budget, it was confirmed that that 'new style' ESA will be paid from day 1 rather than day 8 for people suffering from COVID-19 or required to self-isolate in line with official guidance. As noted above for SSP, it is not entirely clear whether those who are social distancing or shielding in line with Government guidance can qualify for new-style ESA.
In order to qualify for ‘new style’ ESA, there are several National Insurance Contribution (NIC) requirements which are explained on the Entitledto website.
Please note that it is possible to fulfil one of the conditions with Class 1 NIC credits (which a person may get in various circumstances) and there are certain relaxations for the other condition.
You should be aware however, that if you are a person in very low-paid employment or self-employment, you are not necessarily going to easily meet those NIC requirements, particularly, for example, if you work in low-paid self-employment and have not yet have filed your tax returns (this is the method through which you pay NIC if you are self-employed).