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Financial support during the COVID-19 pandemic

Reading time: 8 minutes

This guide was updated on 5/11/20 to reflect the new restrictions in England

Although England entered a second lockdown on 5th November 2020, the government has said that tradespeople should continue to work, following the latest guidance on working safely in people’s homes.

MyBuilder is operating as normal during this time and continuing to see a high demand for trades across the country.

However, if your income has been affected this year, you may be eligible to receive financial help.

At the beginning of November, the government announced an extension to its Self Employment Income Support Scheme (SEISS), which will allow some self-employed tradespeople to claim 80% of their normal profits if their business has been disrupted.

You can see the full details of the scheme and check if you’re eligible on the government’s website.

If you are ineligible to receive help under the SEISS, you may be able to access other forms of support as laid out earlier in the year.

Note: some of the details in this article may have changed since it was originally published in March 2020

Introduction

Many tradespeople will be understandably worried about their finances during the COVID-19 pandemic - from paying the mortgage or rent, to utilities and other bills.

While the government has pledged support for self-employed workers in the form of the Self Employment Income Support Scheme - a taxable grant of up to £2,500 per month - it won’t be available until the beginning of June, so we’ve outlined some of the other key ways tradespeople might be able to access financial support.

This is a guide to some of the main benefits you may be entitled to but there could be others. It is important to seek further advice from organisations like Citizens Advice to get a definitive breakdown of your benefit entitlement.

Universal Credit

Universal Credit is the safety net that provides a financial boost for low income working-age people who are either in or out of work and replaces the following means-tested benefits:

  • Housing Benefit
  • Income Support
  • Income-based Jobseeker's Allowance
  • Child Tax Credit
  • Working Tax Credit
  • Income-related Employment and Support Allowance
​Importantly for self-employed people, you do not have to have paid any National Insurance contributions to be eligible. The conditions are:
  • You must be 18 or over and under pension age
  • You must be entitled to live and work in the UK
  • Your income must not be too high and your capital or savings are under £16,000

Universal Credit was increased following an announcement in October, coming into effect on 1 April. In response to the coronavirus outbreak the chancellor announced a further £20 a week increase and also removed the minimum income floor which means self-employed workers who lose income either due to self-isolating or as a result of the lockdown will get extra money to make up for lost earnings.

If you are in work and already claiming Universal Credit, and are staying at home on government advice, you should report this in the usual way via your online journal. If this means you are working fewer hours, the amount of Universal Credit you receive will adjust as your earnings change.

If you are not claiming Universal Credit, you can apply online. If you are eligible you will need to make an appointment for your new claim interview. This interview will take place by telephone with a work coach. You will be given the number to call to book this appointment when you have submitted your claim.

Pension Credit

If you are over 65 you may be able to claim Pension Credit, a means-tested benefit for people on low income who are at least the qualifying age. You do not have to have paid any National Insurance contributions to claim and there is no upper capital rule but there will be a £1 assumed income for every £500 above £10,000. For example, if you have £11,000, the government will assume an income of £2 per week.

Pension Credit claimants will still be able to claim housing benefit from their council for help with rent payments. If you are a mixed age couple (where one is working age and one is pension age), if you are not receiving Pension Credit and want to make a new claim you will need to claim Universal Credit.

Job Seekers Allowance (JSA)

Contribution-based JSA is paid to people who have paid enough Class 1 National Insurance contributions in the past two years preceding the claim. You can get it even if your partner works or if you have savings. To be eligible, you need to:

  • Be available and actively seeking work
  • Have paid Class 1 National Insurance contributions in the last two years before the benefit year in which your claim begins
  • Have a job commitment agreement

It is important to note that a lot of self-employed people will only have paid Class 2 contributions during the course of their employment. As such, contribution based JSA will not be directly applicable to them. People getting contributions based on JSA can also claim Universal Credit as a top up.

Statutory Sick Pay

Statutory Sick Pay (SSP) is paid by the employer if you satisfy the qualifying conditions, which are:

  • You are an employee
  • You are incapable of work
  • Your normal earnings are at least the lower earnings limit for National Insurance Contributions

Support for Mortgage Interest (SMI)

Support for Mortgage Interest is a secured loan from the Department for Work and Pensions. It is designed to help you pay the interest on your mortgage or the interest on a home improvement loan. You may be entitled to Support for Mortgage Interest if you get:

  • Universal Credit
  • Job Seekers Allowance
  • Pension Credit
 
You only need to to start paying it back when you sell your home. The advantage is that the interest rate on the loan is much lower than the commercial rates available from high street lenders. However, remember you are essentially taking a loan to pay off a loan. Before going down this route you may want to consider more specialist advice from the Money Advice Service. The government will secure the loan by putting a charge on your property.

Discretionary housing payments

A Discretionary Housing Payment (DHP) is an extra payment you can claim from your local authority if you are struggling to pay your rent and get housing benefit or Universal Credit housing support or are entitled to housing benefit under Universal Credit.

You may be able to get a DHP if your benefits don't cover your full rent. DHPs can also help pay a tenancy deposit or rent in advance for a new home, but only if you're already getting housing benefit or the Universal Credit housing element where you live now. To make a claim you need to apply to your local authority. Check with your council if you can apply online, by downloading an application form from their website or by phoning them. You can find their contact details on letters from them, or check at www.gov.uk/find-your-local-council.

Council Tax Reduction Schemes

You could get up to 100% help with your Council Tax bill if you are getting a prescribed benefit or on a low income. You apply to your local authority. You have to make a separate claim for this benefit even if you are in receipt of Employment and Support Allowance. You can apply if you own your home, rent, are unemployed or working and what you get depends on:

  • Where you live (as each council runs its own scheme)
  • Your circumstances (e.g income, number of children, benefits, residency status)
  • Your household income (including savings, pensions and your partner’s income)
  • Whether your children live with you
  • Whether other adults live with you

Additionally, the COVID-19 Council Tax Hardship Fund means that if you already receive some Council Tax support but still have part of the bill to pay, you can now get a bigger reduction – and in some cases will not have to pay Council Tax at all.

Local Welfare Assistance schemes

Local Welfare Assistance schemes help people on low incomes or receiving certain benefits in an emergency. Scotland, Northern Ireland and Wales all have countrywide schemes, whereas in England, the schemes are managed at a local authority level. You could get vouchers or a prepaid card to pay for food, fuel or clothing. You could also get basic living items, such as beds, cookers or fridges. Most councils allow you to apply if you are claiming one of these benefits:

  • Universal Credit
  • Pension Credit
  • The legacy benefits (the benefits that UC has replaced)

Where there is a scheme, the amount of money available may be small and the council may only give help when there is no other way of meeting your needs.

You’ll need to contact your local authority to find out about local funds. If you are unsure of your local authority, use Directgov's tool.

Help with health costs

If you are in receipt of prescribed benefits you will get full help with your NHS prescriptions and health costs. You can also claim it because of low income, for example if your work has dried up.

More information

Trade charities

If you work, have worked, or have family members who work in construction, financial help may be available to you from one of the following charities.

The Lighthouse is a construction industry charity may be able to help if you are currently working or a former worker in the construction industry or allied trades, or are an apprentice to a construction trade.

The CIOB Benevolent Fund offers practical advice, information and financial assistance for Institute members (past and present) and their dependent families worldwide who are in need because of crisis, illness, unemployment or struggling financially.

The Building and Civil Engineering Charitable Trust was set up for the benefit of workers in the construction industry and their families to help alleviate individual financial strain.

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