Guidance to Benefits Recipients, Employees, and Property Occupiers in Consequence of the Coronavirus Outbreak
This information is based upon documents publicly available and is believed to be correct as at 22 March 2020
We have a team of experienced caseworkers able to help you understand how these changes in legislation may be of help to you. Some of the circumstances and exclusions are complicated. Paperweight will enable you to understand what your options are and how to best approach the appropriate Authorities.
1. Universal Credit
The rules relating to eligibility for Universal Credit, rates of payment and other benefits associated with receipt of Universal Credit are unchanged, except for the details set out in the paragraphs below. Access to the HM Government guidance on universal credit can be obtained at https://www.gov.uk/universal-credit
Changes to Universal Credit entitlement and procedures as a result of the Coronavirus outbreak
1.1 Increase in the Basic Rate of Universal Credit
From 6 April there is an increase in the standard allowance in Universal Credit and the basic element in Working Tax Credit for 1 year. Both will increase by £20 per week on top of planned annual uprating. This will apply to all new and existing Universal Credit claimants and to existing Working Tax Credit claimants.
1.2. If you have COVID-19 or are staying at home
You are now able to claim Universal Credit, and if required can access advance payments upfront without needing to attend a jobcentre.
1.3. If you are self-employed
You are able to claim Universal Credit, providing you meet the usual eligibility criteria.
1.4. Changes to Minimum Income Floor Requirements
To support you with the economic impact of the outbreak, and allow you to follow government guidance on self-isolation and social distancing, from 6 April the requirements of the Minimum Income Floor will be temporarily relaxed. This change will apply to all Universal Credit claimants and will last for the duration of the outbreak.
1.5 New claimants
New claimants will not need to attend the jobcentre to demonstrate gainful self-employment.
1.6 Support for Rent Costs
You should check your eligibility for Universal Credit, which is available for people in and out of work. Support for rental costs will be paid through Universal Credit.
From April, there is an increase in Local Housing Allowance rates to the 30th percentile of market rents. This applies to all private renters who are new or existing Universal Credit housing element claimants and to existing Housing Benefit claimants.
1.7 Attending for Interview
If you have an interview booked, you do not need to go to it at the moment because of coronavirus (COVID-19). The Department for Work and Pensions (DWP) will contact you to let you know what you need. Your employer can ask you to stay at home or take unpaid leave if there’s not enough work for you.
2. Lay-offs and short-time working
2.1. What is a layoff?
A lay-off is if you are off work for at least 1 working day. Short-time working is when your hours are cut.
2.2. How long you can be laid off
There’s no limit for how long you can be laid off or put on short-time. You could apply for redundancy and claim redundancy pay if it’s been:
- 4 weeks in a row
- 6 weeks in a 13-week period
2.3. Lay-Off Pay Entitlement and Short-Time Working Payments
You should get your full pay unless your contract allows unpaid or reduced pay lay-offs.
If you’re unpaid, you’re entitled to guarantee pay.
3. Guarantee pay
3.1. Rate and Length of Statutory Lay-Off Pay
You are entitled to guarantee pay during lay off or short-time working. The maximum you can get is £29 a day for 5 days in any 3-month period – so a maximum of £145.
If you usually earn less than £29 a day you’ll get your normal daily rate.
If you work part-time, your entitlement is worked out proportionally.
You cannot claim guarantee pay for any day that you do some work.
3.2. Eligibility for Statutory Lay-Off Pay
- have been employed continuously for 1 month (includes part-time workers)
- reasonably make sure you’re available for work
- not refuse any reasonable alternative work (including work not in your contract)
- not have been laid off because of industrial action
3.3 Statutory Lay-Off Pay and your Employment Contract
Your employer may have their own guarantee pay scheme. It cannot be less than the statutory arrangements. If you get your employer’s payments, you do not get statutory lay-off pay on top of this.
Not paying guarantee pay counts as an unlawful deduction from your wages – you could make a claim to an employment tribunal.
3.4. Applying for Redundancy
You could apply for redundancy and claim redundancy pay if you’ve been laid off without pay or put on short-time and receive less than half a week’s pay for:
- 4 or more weeks in a row
- 6 or more weeks in a 13-week period
- Write to your employer to claim redundancy within 4 weeks of the last day of the lay-off or short-time period.
- Your employer has 7 days to accept your claim or give you a written counter-notice.
- If your employer does not give you counter-notice, you can assume they’ve accepted your redundancy claim.
- A counter-notice means your employer expects work will soon be available – it must start within 4 weeks and must last at least 13 weeks.
Your employer can withdraw their counter-notice in writing.
You must resign to get redundancy pay. The timing is crucial – you have 3 weeks to hand in your notice, starting from:
- 7 days after you gave written notice to your employer (if you did not get a counter-notice)
- the date your employer withdrew their counter-notice
3.6 Extra Work or Claiming Benefits
You can take on another job while you’re laid off or on short-time (unless your contract says you must not).
- get your employer’s agreement
- make sure you’re not working for a competitor
- make sure you’re available for your original job once the lay-off or short-time ends
3.7 Benefits you can Claim
4. Sick pay and Certifying Absence from Work
4.1 Those who follow advice to stay at home and who cannot work as a result will be eligible for statutory sick pay (SSP), even if they are not themselves sick.
4.2 Employers should use their discretion and respect the medical need to self-isolate in making decisions about sick pay.
4.3 Anyone not eligible to receive sick pay, including those earning less than an average of £118 per week, some of those working in the gig economy, or self-employed people, is able to claim Universal Credit and or contributory Employment and Support Allowance.
4.4 For those on a low income and already claiming Universal Credit, it is designed to automatically adjust depending on people’s earnings or other income. However, if someone needs money urgently they can apply for an advance through the journal.
4.5 By law, medical evidence is not required for the first 7 days of sickness. After 7 days, employers may use their discretion around the need for medical evidence if an employee is staying at home.
4.6 HM Government strongly suggests that employers use their discretion around the need for medical evidence for a period of absence where an employee is advised to stay at home either as they are unwell themselves, or live with someone who is, in accordance with the public health advice issued by the Government.
5. Responsibility of Employers if Employee needs Time Off Work to look after Someone
5.1 Employees are entitled to time off work to help someone who depends on them (a ‘dependant’) in an unexpected event or emergency. This would apply to situations related to coronavirus (COVID-19). For example:
- if they have children they need to look after or arrange childcare for because their school has closed
- to help their child or another dependant if they’re sick, or need to go into isolation or hospital
5.2 There is no statutory right to pay for this time off, but some employers might offer pay depending on the contract or workplace policy.
5.3 ACAS has more information on coronavirus and can help with specific queries by phone.
6. Entitlement to Maximum 80% of Pay through the Coronavirus Job Retention Scheme
6.1 Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
6.2 All UK businesses are eligible.
6.3 Employers will need to:
- designate affected employees as ‘furloughed workers,’ and notify employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
6.4 HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
7. Protection against Eviction for Tenants in Rented Accommodation
7.1 Emergency legislation to suspend new evictions from social or private rented accommodation while this national emergency is taking place
- No new possession proceedings through applications to the court to start during the crisis
- Landlords will also be protected as 3 month mortgage payment holiday is extended to Buy to Let mortgages
7.2 The government has announced a radical package of measures to protect tenants and landlords affected by coronavirus. As a result, no tenant in either social or private accommodation will be forced out of their home during this difficult time.
7.3 Emergency legislation will be taken forward as an urgent priority so that landlords will not be able to start proceedings to evict tenants for at least a 3 month period. As a result of these measures, no tenants in private or social accommodation needs to be concerned about the threat of eviction.
8. Coronavirus and Mortgage Payment Holidays
8.1 The mortgage payment holiday will provide flexibility in repaying your mortgage by allowing you to stop or reduce your monthly payments for up to three months. This won’t be suitable for everyone but could provide much needed help if you need it, but this won’t be free money.
8.2 The first step will be to contact your lender and not everyone will be granted a payment holiday. There will be a fast track approval process in place, so you should get a quick decision although any unpaid interest will still need to be paid back, individual credit ratings should not be affected.
8.3 It is likely the lender will spread your outstanding payments over the outstanding term of your mortgage, so you will see an increase in your monthly mortgage payments. The shorter the term left on your mortgage, the larger the increase in your monthly payments, once the mortgage payment holiday is over. You should consider the impact this will have on your future financial commitments.
8.4 It is possible some lenders will consider increasing the length of your mortgage term to help mitigate this. In any case you should speak to your lender or mortgage advisor and ask them to provide an explanation of what this will mean for you and understand any other options which may be available to you.
8.5 If you want to apply for a mortgage holiday, firstly check with your lender and have a look at your mortgage terms and conditions to see if you’re eligible for a mortgage holiday and if they are allowed under your mortgage agreement.
8.6 The criteria will vary from lender to lender:
- The length of your payment holiday depends on the lender. Some will allow you take up to 12 consecutive months off from paying the mortgage, while others will permit only up to six months over the life time of the mortgage.
- Typically, you will often have needed to have made payments on time for a minimum period before you’re eligible to take a mortgage holiday.
- Your ability to take a mortgage holiday also depends on the size of your mortgage and the value of your home. Some lenders will only allow a mortgage holiday if the loan-to-value of your mortgage is lower than 80%.
9. Income Tax and other Taxation
9.1 What to do If you cannot pay your Tax Bill on time
Contact HM Revenue and Customs (HMRC) as soon as possible if you have missed your payment. How you contact HMRC depends on what you need to pay.
You have to pay interest if you pay late. You may avoid penalties by contacting HMRC as soon as possible.
9.2 If you cannot pay Income Tax because of Coronavirus
Call the HMRC Coronavirus helpline.
HMRC Coronavirus Helpline
Telephone: 0800 015 9559
Monday to Friday, 8am to 8pm
Saturday, 8am to 4pm
Find out about call charges
9.3 If you cannot pay your Self Assessment tax bill
If you’ve filed your return and owe less than £10,000 you might be able to arrange to pay in instalments online.
You do not need to contact HMRC if you have set up a payment plan online.
Call the Self Assessment helpline if you’ve missed your payment date or you cannot use the online service.
Self Assessment Payment Helpline
Telephone: 0300 200 3822
Monday to Friday, 8am to 4pm
Find out about call charges
9.4 If you cannot pay other Taxes
If you’ve received a payment demand, like a tax bill or a letter threatening you with legal action, call the HMRC office that sent you the letter.
Call the Payment Support Service if you have not received a bill or letter.
Payment Support Service
Telephone: 0300 200 3835
Monday to Friday, 8am to 4pm
Find out about call charges
Nominated partners in business partnerships can negotiate time to pay with HMRC on behalf of the partnership or individual partners.