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Benefits for people who are working or were working prior to COVID 19

Benefits available to people who are working or were working prior to the coronavirus pandemic.

The Welsh Government announced on 22 September 2020:

  • A new £500 payment to support people on low incomes who are asked to self-isolate if they have coronavirus;
  • Strengthened regulations to ensure employers support people who need to self-isolate.

We will provide further details when the regulations are confirmed.

 

Have you been furloughed? (Job Retention Scheme)

To be furloughed means that you have either been temporarily laid off due to the current situation; or you have had to stop work because you have been identified as vulnerable (ie received a letter from the NHS) and have to be shielded or are living with someone who has to be shielded; or you have child care responsibilities. A period of furlough can be short or long term but you still have a contract of employment with your employer. During a period of furlough you can seek other employment as long as long as this is allowed within your contract of employment (please check first).

It is your employer who has the authority to furlough you and you have to agree to it. Some employers are not furloughing staff despite employees meeting the above situations, or cutting hours of the workforce instead of laying off some of their staff. Unfortunately you cannot insist on being furloughed, however your employer may find the following links helpful: 

It is your employer who applies for you to be furloughed and you must have been paid through PAYE and been employed before 19 March 2020. Those on zero hour contract, students and those who have no recourse to public funds can qualify for this Job Retention Scheme. Your employer recovers 80% of your gross earnings back from HMRC to assist with paying your wages. It is at the discretion of your employer whether they top this up to your full wages (if you are paid at the national minimum wage, your employer can legally pay you 80% of your usual wage). You will still be liable to pay national insurance and tax.

Important new details: the government announced the details of the extension to the Job Retention Scheme on 29/05/20:

  • Details of whether your employer can still furlough you can be found here: https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme
     
  • June and July: The government will continue to pay 80% of wages up to a cap of £2,500 as well as employer National Insurance contributions and pension contributions. Employers are not required to pay anything.
     
  • 10 June 2020: If you have not already been furloughed by this date, your employer can no longer use the Job Retention Scheme to pay your wages.
     
  • From 1 July for your employer to be eligible to claim from this date they must have previously submitted a claim for you in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June. For the minimum 3 consecutive week period to be completed by 30 June, the last day you could have been furloughed for the first time was 10 June.
     
  • August: The government will continue to pay 80% of wages up to a cap of £2,500. Employers will now need to pay employer National Insurance contributions and pension contributions - for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed. You should still be paid 80% of your wages (up to the cap) of your furloughed hours that you are not working and your employer is claiming assistance from the Job Retention Scheme for - you should be paid your full wage by your employer for the hours you actually work.
     
  • September: The government will reduce the amount they pay under the Job Retention Scheme to pay 70% of wages up to a cap of £2,187.50. Employers will have to pay employer National Insurance contributions and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed. You should still be paid 80% of your wages (up to the cap) of your furloughed hours that you are not working and your employer is claiming assistance from the Job Retention Scheme for - you should be paid your full wage by your employer for the hours you actually work.
     
  • October: The government will reduce the amount they pay under the Job Retention Scheme to pay 60% of wages up to a cap of £1,875. Employers will have to pay employer National Insurance contributions and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed. You should still be paid 80% of your wages (up to the cap) of your furloughed hours that you are not working and your employer is claiming assistance from the Job Retention Scheme for - you should be paid your full wage by your employer for the hours you actually work.
     
  • The furlough Job Retention Scheme ends on 31 October 2020
     
  •  Further guidance on flexible furloughing, when they can still join the scheme and how employers should calculate claims is available at https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-step-by-step-guide-for-employers.  This may mean that depending on where you work and whether your employer can commence business again, that you may be more at risk of being laid off, please see below for further advice on what benefits you can claim if needed.
     
  • If you are still employed following being furloughed and have been earning over £520 per month until the end of January 2021, your employer will be entitled to a £1,000 bonus to incentivise your employer to keep you in your job.

The Welsh Government has provided sources of online training for furloughed workers, to both update your skills if you will need to find a new job, or even if you are bored and details of what is available can be found at: https://gov.wales/online-training-furloughed-workers-coronavirus.

If you are furloughed for benefit purposes you are still counted as a worker and can continue to receive 'in-work' benefits that you were previously receiving such as tax credits, housing benefit, council tax reduction, universal credit.

It is important to remember that these benefits are means tested - any change you have in income you should notify the relevant organisation (Her Majesty's Revenue & Customslocal authority or Department for Work and Pensions).

If your income has reduced, you should check whether you have now become entitled to any benefits to top-up your income (read on for more information) and check with us whether you qualify for the Council Tax Reduction Scheme.

 

Have your hours of employment been temporarily reduced?

Working Tax Credit

Usually if your hours of work reduce it could affect any entitlement to working tax credit you receive. To qualify for working tax credit you have to be working at least 16 hours per week (if you are a lone parent or a disabled worker or claim as a couple and your partner is in hospital, prison, receives Carer's Allowance or is incapacitated or you are over 60); at least 24 hours per week (if you are a couple and responsible for children, one of you has to work at least 16 hours); or at least 30 hours per week for other workers over 25. 

If your hours of employment have been temporarily reduced due to COVID-19 and you no longer meet the minimum number of hours you are expected to work; the government has confirmed that you will still receive your usual tax credit payments providing that you are still employed or self-employed, this will not apply if you lose your job, are made redundant or cease trading. HMRC will continue to treat you as working your normal hours until the Job Retention Scheme and Self-Employment Income Scheme close, which we now know will happen on 31 October 20201, even if you are not using the schemes. If after this period your usual hours of work have not been reinstated you should qualify for the 4 week run on of Working Tax Credit.

A change of your earnings is not a change of circumstances that you have to report for tax credits; however by reporting this change you are reducing the risk of being over or underpaid when they finalise your award at the end of the financial year.  If you have had a change to your earnings and want your tax credits recalculated you should ring Tax Credits on 0345 300 3909 or can report changes online https://www.gov.uk/changes-affect-tax-credits.  The first annual £2,500 of any increase or decrease are disregarded, this means that even though your income has reduced you may not be entitled to an increase in your tax credit payments.

Important: if there has been any change that means you are no longer claiming as a couple and need to make a claim as a single person or become part of a couple - this always means you have to make a new Tax Credit claim, which means you will usually need to claim Universal Credit.

 

Housing Benefit / Council Tax Reduction

These benefits are means-tested benefit. If you have any change in your income (it decreases or increases) it is important that you notify us as soon as possible. This will enable us to reassess your entitlement to this benefit and to prevent any underpayment or overpayment. Make a new claim for Council Tax Reduction.

If you are renting from the private sector the amount of help you get due to your eligible rent from the local housing allowance has increased for this year, the current maximum amounts are here: Local Housing Allowance rates. The over inflation increases are currently for 2020/21 only, although we do not currently know if they will reduce to previous levels next year. 

 

Have you been laid off?

The Welsh Government offers redundancy support, details of what is available can be found here: https://workingwales.gov.wales/how-we-can-help/redundancy-support

If your employment has ended and you are no longer employed you may be entitled to claim benefits.

Working Tax Credit

If you were receiving working tax credit prior to your employment ending you will continue to be entitled to working tax credit for the following 4 weeks.  This is known as the 'run-on'.

'New-Style' Jobseeker's Allowance

To qualify for 'New-Style' Jobseeker's Allowance you must meet the relevant national insurance contributions conditions (check if you have worked at some point over the least 3 years).  It is a contributory benefit and is not means-tested, so it doesn't matter about the income of your partner if you have one or whether you have savings or capital.  You must meet the basic rules of entitlement e.g. you must not work more than 16 hours; you must have a signed claimant commitment outlining your work-related requirements.

Income that is taken into account is any earnings you receive for part-time work (under 16 hours), less the relevant earnings disregards (usually £5) and occupational pensions of more than £50.00; most other income is disregarded. New-Style Jobseeker's Allowance is paid for a maximum amount of six months.  Universal Credit can top up contributory 'new-style' JSA, for example if you have rent to pay and are not already in receipt of housing benefit or you have child and are not already in receipt of tax credits. 

Details on how to claim are found on https://www.gov.uk/how-to-claim-new-style-jsa

Universal Credit

WARNING:  If you are currently receiving a legacy benefit - Income-related Employment and Support Allowance, Income-based Job Seeker's Allowance, Child Tax Credit and/or Working Tax Credit or Housing Benefit, always seek independent advice before making a claim for Universal Credit. This is because:  

  • No new claims (or re-claims) for legacy benefits (except Housing Benefit for some temporary or supported accommodation) can be made unless you meet the SDP (severe disability premium) gateway conditions. This is a complex area but if you have been in receipt of another legacy benefit within the last month and the way this benefit was made up included 'the Severe Disability Premium'  and you continue to qualify for it you will not be able to claim Universal Credit.  This is the only group of people who can now make a claim for legacy benefits. 
  • As soon as you submit a claim for Universal Credit any entitlement to legacy benefits ceases. You will not be able to re-claim tax credits, even if you are not entitled to a payment of Universal Credit.  

People who are of working age (18 to pension age) and need to claim a means-tested benefit (entitlement will depend on your capital and/or income of you and your partner) for the first time will now have to claim Universal Credit unless you meet the SDP (severe disability premium) gateway conditions. 

If you are a couple and one of you is over state pension age and one of you is under state pension age in benefit terms this means you are a mixed aged couple - this means you are usually unable to claim Pension Credit and may need to claim Universal Credit - please seek advice first.

Universal Credit has replaced new claims for Income-based Jobseeker's Allowance; Income-related Jobseekers Allowance; Income Related Employment and Support Allowance; Housing Benefit; Income Support; Working Tax Credit and Child Tax Credit. Claims are made and managed online via a 'journal'
https://www.understandinguniversalcredit.gov.uk/new-to-universal-credit/help-with-managing-your-money/

A claim for Universal Credit will end any entitlement or future entitlement to the benefits it has replaced unless you meet the SDP (severe disability premium) gateway conditions. If you are receiving one of these benefits you are advised to have a better off calculation to check if you are better off staying on your current benefits with adjustments for any changes in your circumstances or claiming Universal Credit. 

To qualify you (and your partner if you have one) must have less than £16,000 in capital and meet the means test. The amount you are entitled to will differ depending on your personal circumstances and what other income or earnings you have coming in and the amount of savings you have between £6,000 to £16,000. Claimants may qualify for this benefit if they are in work; not working; sick or have caring responsibilities.

All Universal Credit claimants and their partners must have a signed claimant commitment which will outline their work requirements in order to receive this benefit. Universal Credit can be the only income you have coming in or top up other income (eg new-style JSA) to the level that the Government says that you need to live on. 

The Government have announced that once you have made a claim online, if they need any further information to process your claim, they will either request this via your online journal or call you. You do not have to call them.  

Work-related requirements

To qualify for Universal Credit or New-style Jobseeker's Allowance your jobseekers agreement / claimant commitment will outline your work related requirements; these include Work Focused Interviews; Work Preparation; Work Search and Work Availability. Failing to comply with your work related requirements can result in your benefit being sanctioned. During this period, work search and work availability requirements have been suspended and sanctions for failing to comply have been removed. Claimants and their partners will be subject to work focused interviews and work preparation requirements, however these requirements are currently limited due to coronavirus.

All face to face appointments were suspended and contact will still be mainly via telephone; email or through your online journals:

  • From 30 March 2020 all work search and work availability were suspended for 3 months, which can be extended by the DWP if necessary due to Coronavirus.
  • Until July it was straightforward that work search and work availability requirements were suspended and sanctions for failing to comply had been removed. Now it is unclear, the three Swansea Jobcentres remain closed except for emergencies and interviews remain being done by phone. The local Jobcentre partnership manager has agreed to contact the Welfare Rights Team when the arrangements change, currently there are no dates for the opening of local jobcentres. As far as we know, you should not be subject to any sanctions until your claimant commitment has been updated and in affect nothing appears to have currently changed.  
  • The Summer Statement from the Chancellor on 8 July 2020 confirmed that additional work coaches will be employed to assist new claimants to return to work, the effect of coronavirus has meant many more people have needed to claim Universal Credit. The amount of the flexible support fund available to the Jobcentre staff to help you obtain work or additional work will be increased, as well as additional support for people under 25. There is a plan for additional support online support from the private sector in the autumn, if you have been unemployed for less than three months, but no details have yet been announced.
  • Department of Work and Pensions Work Coaches are prioritising support as follows:
    1. Newly unemployed claiming Universal Credit
    2. Those claiming 'new-style' (contributory) Job Seekers Allowance
    3. Claimants that have been unemployed prior to the Covid-19 pandemic


Childcare costs

If you become liable to pay childcare costs for the first time you may be able to receive some financial support via Tax Credits (if you are already receiving Child Tax or Working Tax Credit); or Universal Credit; and if you are receiving Housing Benefit, you should notify us of these charges.

If you are liable to pay childcare costs to your childcare provider and your child is no longer able to attend due to the necessity to stay at home, HMRC have confirmed that for tax credits these will still be paid. If you are no longer paying a childcare provider to care for your child, childcare costs will be removed from any housing benefit claim (although any additions paid as part of a tax credit claim for childcare will be taken in to account.)

For Universal Credit the government have now confirmed that new childcare costs for both critical workers and non-critical workers can be claimed https://www.gov.uk/government/publications/universal-credit-and-childcare/universal-credit-childcare-guide but childcare costs will only be paid for childcare that has actually taken place.

 

Council Tax Reduction 

If you have been laid off and you are on a low income or in receipt of Universal Credit you could get Council Tax Reduction to help you pay your Council Tax. How much you may get will depend on your income and circumstances. You can make a claim online. If you are already in receipt of Council Tax Reduction and your income or circumstances have changed please report the change online or email benefits@swansea.gov.uk.

 

Housing Benefit 

If you are already in receipt of Housing benefit and your income or circumstances have changed please report the change online or email benefits@swansea.gov.uk. A new claim for Housing Benefit can be accepted in limited circumstances. More information on Housing Benefit

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