⚠️ 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: £500 Test and Trace Support Payment
Here are some frequently asked questions covering what we know about the new payment, and what we don’t.
What is the NHS Test and Trace Support Payment?
There is a new legal duty in England to self-isolate in place from 28 September 2020 if you test positive for coronavirus or are contacted by NHS Test and Trace, with fines for breaches. You can read more about it on GOV.UK.
In response to concerns that people were struggling to self-isolate due to financial constraints, a £500 lump sum support payment will be made available for people on low incomes who cannot work from home and have lost income as a result of self-isolating.
The scheme will apply to people notified to self-isolate on or after 28 September, not before that date.
The devolved administrations in Scotland, Wales and Northern Ireland are implementing their own schemes.
Who will be making the payments?
Local authorities in England will be making the payments. You can find out how to contact your local authority on GOV.UK.
Local authorities should have the schemes in place by 12 October. If you are told to self-isolate before then (from the 28 September) you will receive backdated payments, if you are eligible, once the scheme is set up in your local authority.
Who can claim the NHS Test and Trace Support Payment?
In England, the criteria for self-isolation payment is:
- have been instructed to self-isolate by NHS Test and Trace, either because you have tested positive or are in close contact of a positive case
- are employed or self-employed
- are unable to work from home and will lose income as a result
- are currently receiving Universal Credit, Working Tax Credit (WTC), income-based Employment and Support Allowance, income-based Jobseeker’s Allowance, Income Support, Housing Benefit and/or Pension Credit
It is unclear whether people who are entitled to WTC but who have it reduced to nil due to income levels (so you only receive child tax credit payments), qualify for the payment and we are seeking confirmation.
Local authorities in England will have discretion to award the £500 self-isolation payment to those who do not receive qualifying benefits.
People in the same household can each make an individual application to receive the payment, if you each meet the criteria.
How do I apply?
There are no details as yet, although the expectation is that you will need to make an online application (or a telephone application if you can’t use the online application because you are digitally excluded) and will have to submit supporting evidence such as:
- a notification from NHS Test and Trace asking you to self-isolate (this will include a Unique ID number or ‘code’);
- a bank statement; and
- proof of employment, or, if you are self-employed, evidence of self-assessment returns, trading income and proof that their business delivers services which cannot be undertaken without social contact.
It may be the case that each local authority’s processes and requirements differ slightly.
Local authorities should be able to access an internal computer system that shows if you are receiving any of the qualifying benefits, as well as access to NHS Test and Trace data, to verify if you have been told to self-isolate.
Is the £500 taxable?
We understand that the intention is that these payments will be subject to income tax, although not subject to National Insurance contributions, for both employees and the self-employed.
Although it is unclear at this stage, we anticipate the payment will be paid gross by the local authorities – that is, without any tax taken off it before it is paid to you.
If that is the case, then if you are:
- self-employed: you will need to include the payment in your tax return as a receipt of your business and pay any tax through the tax return. It is unclear, as yet, where the payment should be included. We will seek to clarify this and will put out some further guidance on this in due course.
- employed: HMRC will probably try and collect the tax due by ‘coding’ the payment into your tax code, or if they are unable to do that, will pick it up as income at the end of the tax year in the P800 reconciliation. For more information on how tax codes work, see our guidance in the Tax basics section. For more information on the P800 process, see our guidance here.
It is important that you budget for the fact that, if you have taxable income from other sources in the 2020/21 tax year and it is more than your tax-free personal allowance, you will have to pay tax on the £500 support payment.
Can I get it on top of Statutory Sick Pay?
Yes, you will be able to receive this payment on top of any Statutory Sick Pay you are entitled to.
Are the payments counted for tax credits or universal credit?
We expect the payments will not be counted as income for tax credits or universal credit, which is a logical step and follows the treatment of payments under the earlier self-isolation payment scheme piloted in parts of England. We are currently waiting for confirmation of this and will update the website once we know more.
What about the scheme that made payments of up to £182?
A pilot scheme, called NHS Test and Trace Self-Isolation Payment, was announced in August, under which payments of up to £182 were made to people who tested positive for COVID-19 and their contacts in Blackburn with Darwen, Pendle, and Oldham.
The new £500 Test and Trace Support Payment is available across England and replaces the pilot in those areas from 28 September 2020.
Can I get the £500 payment more than once?
If you are asked to isolate more than once, then it seems that a claim can be made for each period of self-isolation required. All eligibility criteria must be met and supporting evidence provided for each claim.
The more times you get the £500 payment, the more money you may need to put aside to cover the tax that will be due on it.
Do I qualify if I have been told by the official NHS COVID-19 contact tracing app to self-isolate?
No. Users of the official NHS COVID-19 contact tracing app are anonymous. Although the app advises you to self-isolate if you have been in close contact with someone who has tested positive, following the advice on the app, whilst undoubtedly advisable, is not a legal requirement and, because the app is anonymous, the notification to self-isolate cannot be verified by Local Authorities.
It seems likely, however, that if the app advises you to self-isolate if you have come into close contact with someone who has tested positive for coronavirus, then you might also be contacted officially by NHS Test and Trace at some point. Once you are contacted by NHS Test and Trace and told to self-isolate, you may then meet the conditions to qualify for this payment.
What about Scotland, Wales and Northern Ireland?
There has been no announcement as yet for Northern Ireland.
In Scotland, the payment is called the Self-Isolation Support Grant. You can now apply for a grant. The Scottish Welfare Fund will deliver the grant – this is administered by local authorities. More details are available on the Scottish Government website.