Estimated reading time: 6 Minutes
8 April 2020
Many people whose income has been affected by coronavirus will not be covered by the UK Government’s income replacement schemes (which are outlined in our article on employment and coronavirus). These groups include:
- employees who are made redundant by their employer, rather than being furloughed;
- employees whose hours and/or pay are reduced, rather than being furloughed or made redundant;
- employees who were not on a PAYE payroll on or before 19 March 2020 and who had not been notified to HMRC on an RTI submission on or before that date so cannot be ‘furloughed’ by their current employer (and whose previous employer refuses to re-hire and furlough them);
- employees who are unable or unwilling to go to work or have taken unpaid leave because they are in a vulnerable group, live with a vulnerable person, or are afraid to go to work (and have not been furloughed);
- employees who are self-isolating or sick and cannot live on statutory sick pay alone;
- people who are not eligible for statutory sick pay because they earn less than £120 a week;
- self-employed people who started their business after April 2019 or haven’t yet filed their 2018-19 tax return (although people have until 23 April to file), and
- people who are unable to work because they are caring for children, but have not been furloughed.
If these people are on a low income, they are likely to be eligible for Universal Credit and other benefits. Nearly one million people in the UK applied for Universal Credit alone in the two weeks to 1 April 2020.
The UK Government is responsible for the vast majority of welfare benefits (except for council tax reductions and the Discretionary Assistance Fund). It has a page dedicated to information about coronavirus and claiming benefits, which is regularly updated.
Changes to the benefits system
The UK Government has made a range of changes to the benefits system in response to coronavirus, including:
- suspending face to face Jobcentre appointments, and conducting all interviews over the phone;
- suspending assessments for disability and health-related benefits (such as Personal Independent Payment (PIP) and Employment and Support Allowance (ESA)) for three months;
- removing requirements to actively look for work (and the associated sanctions for not doing so) for UC, ESA and Jobseekers’ Allowance (JSA) for three months;
- increasing Universal Credit and Working Tax Credits by £20 a week on top of planned annual uprating;
- removing the requirement for a GP ‘fit note’ to claim ESA or Universal Credit;
- removal of the ‘minimum income floor’ in Universal Credit for self-employed people. However, any money paid to self-employed people from the Self-Employment Income Support Scheme will be treated as earnings in determining the support provided through Universal Credit;
- Increasing the Local Housing Allowance so that it covers up to 30% of the market rent in each area;
- paying ‘New Style’ Employment and Support Allowance (ESA) to people who are too sick to work from day one of their sickness, rather than day eight;
- allowing people to continue to receive Carer’s Allowance even if they are unable to provide care due to coronavirus.
The sections below provide an overview of some of the benefits that people in Wales whose income has been affected by coronavirus might be eligible for, along with links to specialist benefit advice services.
Universal Credit is a benefit for working age people who are in or out of work, and on a low income.
Universal Credit replaces six existing means-tested benefits. All new applicants have to claim Universal Credit, and existing benefit claimants are gradually being moved onto it.
Universal Credit is made up of a ‘standard’ allowance, and additional money for households with children and for childcare. Households that include people with disabilities or health conditions also get extra money each month. People in rented housing may also be eligible for help with housing costs.
Universal Credit is not available to households that have more than £16,000 in savings.
Universal Credit can be applied for online, but the first payment take up to five weeks to be paid (which is a design feature of the benefit, not a processing period). With hundreds of thousands of people applying to Universal Credit at the same time, there may also be additional delays. The Bevan Foundation has called for the five week wait to be shortened.
Advances are available, but they have to be paid back.
People in Wales can apply to the Discretionary Assistance Fund for help with essential costs if they are in financial hardship while waiting for their first Universal Credit payment (see below for details).
Discretionary Assistance Fund
The Welsh Government’s Discretionary Assistance Fund (DAF) provides non-repayable grants to people on low incomes in Wales who:
- need help with essential costs (such as food, gas, electricity, clothing and emergency travel) following ‘emergency situations’, or who are in extreme financial hardship for reasons including delays in benefit payments, or
- need help to live independently rather than in a care home or hospital.
While the grant is not designed to cover ongoing financial shortfalls, it could provide help to people in hardship who are awaiting their first Universal Credit (or other benefit) payment. It can be applied for online.
‘New Style’ Employment and Support Allowance
‘New Style’ Employment and Support Allowance (ESA) is available to people whose disability or health condition affects how much they can work, whether they have a job or not.
ESAis now payable from the first day of sickness absence to people with coronavirus or who are self-isolating. This means that claimants who meet the criteria should receive their first payment after around two weeks.
ESA cannot be claimed at the same time as statutory sick pay, but it can be claimed alongside or instead of Universal Credit.
From 6 April, the basic ESA rate is up to £58.90 a week for people under 25, and £74.35 a week for people over 25. Other components to the benefit can be added for specific circumstances.
ESA is only available to people who have paid enough National Insurance contributions in the last 2 to 3 years. It can be applied for online.
‘New Style’ Jobseeker’s Allowance
People who are unemployed or work less than 16 hours a week might be able to claim ‘New Style’ Jobseeker’s Allowance if they have made enough National Insurance contributions for the past two years.
New Style JSA is a fortnightly payment that can be claimed on its own or at the same time as Universal Credit. A claimant’s capital and savings (and their partner’s capital, savings and income) are not taken into account. It can be applied for online.
Council tax reductions
People in Wales may be entitled to pay less council tax if their income is affected by coronavirus or if they receive certain benefits. The Welsh Government has an online eligibility checker. To apply for a reduction people should contact their local council.
Discretionary housing payments
Discretionary housing payments (DHPs) provide short term support to people receiving Housing Benefit or Universal Credit and are struggling with housing costs.
Local councils administer DHPs (with considerable discretion), although the general rules are set by the UK Government. Shelter Cymru has a search facility to find DHP contact details for each Welsh council for people to apply.
Bereavement Support Payment
Bereavement Support Payments are available to people under State Pension age whose husband, wife or civil partner died on or after 6 April 2017.
People may be eligible if their partner paid National Insurance contributions for at least 25 weeks, or if they died because of an accident at work or a disease caused by work.
It is made up of a payment of between £2,500 and £3,500, and then up to 18 monthly payments of either £100 or £350. The higher rate is paid to people with dependent children.
The payment does not affect eligibility for other benefits for one year after the first payment. Information about how to apply is online.
Help with funeral costs
A Funeral Expenses Payment can help people on low incomes with funeral costs. It can be applied for over the phone or by post.
People may be eligible for other benefits, depending on their individual circumstances.
For example, a person who gives up work to care for someone full time may be eligible for Carer’s Allowance. A person aged over 65 that needs care could receive Attendance Allowance. A person of state pension age on a low income may be eligible for Pension Credit. Someone with a disability could claim Personal Independence Payment if they don’t already.
The benefits system is complex, and people should contact a specialist benefits advice service to help establish what they might be eligible for. There are a range of benefits advice services in Wales, including:
- Citizens Advice can provide benefits and employment advice online or on the phone – 03444 77 20 20. It also has an information page on coronavirus;
- Shelter Cymru has a coronavirus advice page and can provide housing related advice by phone – 08000 495 495;
- Age UK has a benefits calculator for older people; Age Cymru also has an advice line: 08000 223 444;
- The Money Advice Service’s page on Coronavirus – what it means for you provides information relating to personal finances, insurance and scams. It provides advice through its helpline (0800 138 7777), web chat and on WhatsApp. It also has an debt advice search tool;
- Turn2Us is a national charity and welfare benefits advice service It has a page on coronavirus, which includes a benefits calculator.
Article by Hannah Johnson, Senedd Research, National Assembly for Wales
We’ve published a range of material on the coronavirus pandemic, including a post setting out the help and guidance available for people in Wales and a timeline of Welsh and UK governments’ response.
You can see all our coronavirus-related publications by clicking here. All are updated regularly.