⚠️ We are working hard to ensure this guidance is up to date. However, you should bear in mind that things may change as the government respond to the ongoing situation.
Coronavirus: Self-employment: 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. You may be worried about a reduction to your income or that you may lose your work. This page tells you what you may be able to claim.
This page explains what sickness benefits may be available for self-employed individuals. If you are self-employed and have found your hours reduced or your self-employed work has stopped completely see our other guidance for help that may be available.
I am unable to work due to illness or self-isolation
Statutory Sick Pay (SSP) is not available for the self-employed. If you are unable to work because you are ill or are self-isolating then you may be able to claim new-style Employment and Support Allowance (ESA) if you have paid enough National Insurance contributions.
If you your claim relies on having paid Class 2 National Insurance contributions in 2019/20, your eligibility for a claim in 2021 may be affected if you have not already paid these contributions to HMRC by the time you claim.
Pension income may be taken into account for new-style ESA, but otherwise it is not affected by any savings or your partner’s income. You can find out how to claim on GOV.UK.
You may also qualify for a £500 test and trace self-isolation payment in England. Similar schemes exist in Wales, Scotland and Northern Ireland. You can find out more on GOV.UK.
If you have not paid enough contributions to claim new-style ESA or if it is not enough to cover your outgoings, you may need to apply for other benefits.
The main benefit is universal credit (UC) which 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 is an exception for frontier workers. Instead, if you need financial support you will need to claim UC
⚠️ If you are currently receiving any of the benefits UC is replacing, they will end when you make a UC claim. If you currently receive tax credits, see below. 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.
You should also be aware of the following:
- If you or your partner 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.
- UC takes into account savings, income and circumstances; and for joint claims, the savings, income and circumstances of both claimants. If you have a partner and their income is too high, you may not qualify for any help.
- If your partner already 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 Government have announced that a rule called the ‘minimum income floor’ – which sometimes reduced the amount self-employed people could get in UC – has been temporarily suspended and is scheduled to be re-introduced from 1 August 2021.
If you are making a new claim to UC, this might mean you are eligible to open a Help-to-save account, which pays a tax-free government bonus of up to 50% of the amount saved. While saving is unlikely to be your priority at this time, if you open one while you are eligible, you can continue to save into the account for up to four years, even if you no longer claim UC. Our Help to Save press release explains more.
If you/your partner already receive tax credits or benefits
If you are already entitled to working tax credit, you will continue to be treated as in work for up to 28 weeks of your illness/sick leave as long as you would have certain sickness benefits if you were employed. See our detailed guidance for more information.
You should also be aware that if you do claim new-style ESA, 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.
As explained above, if you make a claim for UC, your tax credit claim will end even if you are not entitled to any UC payments.
If you are already in receipt of UC, you should speak to the DWP if you claim new-style ESA. This will be taken into account as income and will reduce your UC pound for pound.