This is a fast-moving issue and should be read as correct at the date of publication (02.04.20).
This piece was updated on 2 April 2020 following changes to the benefits system in the light of the coronavirus outbreak. Since this Insight was first published on 13 March, the Government has announced a series of measures relating to benefits.
The spread of coronavirus is placing unprecedented demands on household finances. With social distancing measures closing entire sectors of the economy, there has been an increased reliance on the benefits system resulting in nearly a million new claims. This has prompted calls for significant Government intervention.
This Insight outlines social security measures adopted by the Government. It should be read as accurate at the time of publication. The Government has signalled that it is open to further action if necessary.
The wider Government response
In response to the coronavirus pandemic the Government has announced a series of measures. These include the Coronavirus Job Retention Scheme, for ‘furloughed’ employees and the Self-Employed Income Support Scheme. But even with these alleviating demand on the social security system, many are relying on benefits to help them through the crisis.
As part of the 2020 Budget, measures were introduced to ease and speed up access to certain benefits. Benefit assessments and meetings at Jobcentres have been suspended. On 20 March, Chancellor Rishi Sunak also unveiled increases to Universal Credit (UC) and tax credits, as well as more help for renters.
What support can people receive if they are off work through sickness?
Many employees will be entitled to Statutory Sick Pay (SSP) if they fall ill, worth £95.85 a week from 6 April. As a temporary measure, it will be paid from the first day of sickness absence, rather than the fourth.
The Government has advised people who are not entitled to SSP to claim UC or contributory ‘New Style’ Employment Support Allowance (ESA).
When can people expect to receive their first ESA or UC payments?
Claimants are not usually entitled to contributory ‘New style’ ESA for the first seven days of their claim. Thereafter, it is paid every two weeks in arrears, meaning the first payment is usually made within three weeks.
In the Budget, the Chancellor announced that ESA would be payable from the first day of sickness absence to those directly affected by Covid-19 or self-isolating. This means that claimants who meet these criteria should receive their first payment after around two weeks.
No changes have been announced concerning the wait for first UC payments, so new claimants will usually have to wait around five weeks before receiving their first monthly payment.
They can apply to receive an advance in the days immediately following their claim. Whilst organisations such as the Child Poverty Action Group have called for these advances to be made non-repayable for the duration of the present crisis, the Government has ruled this out.
Has the Government increased benefits during the crisis?
On 20 March the Chancellor announced increases in UC, Working Tax Credit, and the maximum amounts that people can receive to help with rent payments. This followed calls from organisations such as Citizens Advice and the Resolution Foundation. This means, from 6 April:
- The UC standard allowance and the Working Tax Credit basic element will increase by £20 a week (equivalent to £1,040 a year) above the planned annual uprating. This will apply to all UC claimants and to existing WTC claimants.
- Nearly £1 billion of additional support for renters, through increases in Housing Benefit and UC. Local Housing Allowance rates will pay for at least 30% of market rents in each area.
Will claimants still have to attend face-to-face meetings?
The Budget announced measures to suspend face-to-face meetings at the Jobcentre for new UC claimants for those advised to self-isolate. The Department for Work and Pensions (DWP) now goes further, advising that all new claim interviews will take place by telephone.
Many benefit claimants usually have regular meetings in Jobcentres. But on 19 March, the DWP announced that anyone receiving benefits would not have to attend Jobcentre appointments for at least three months.
The DWP now advise: “You should not attend the jobcentre unless directed to do so for an exceptional purpose.”
What about assessments for disability benefits?
Claimants of sickness and disability benefits may be required to attend assessments to determine their eligibility and the level of support needed.
Temporary regulations in force from 13 March allow UC and ESA claimants “affected” by coronavirus (anyone having Covid-19 or required to self-isolate) to be treated automatically as having limited capability for work, without the requirement for any medical evidence or to undergo a Work Capability Assessment.
On 17 March, the DWP suspended all face-to-face assessments for sickness and disability benefits for three months.
Anyone with an assessment appointment will be contacted, “to discuss next steps and alternative arrangements,” which might involve telephone or paper-based assessments. DWP also announced on 23 March that “reviews and reassessments” for all disability benefits will be suspended for at least three months. Where benefit awards are due to expire, the DWP will extend end-dates so that claimants continue to receive their existing level of financial support.
Can people still be sanctioned during the crisis?
Many benefit claimants have work-related conditions. Failure to meet these can result in sanctions.
Allowing those who are “affected” by coronavirus to be treated as having limited capability for work (as described above) also removes the requirement to be available for, or search for work. Claimants might still be asked to take steps to prepare for work.
Although Jobcentre appointments have been suspended, interviews may still take place over the phone.
To help those affected by the economic crisis, there have been calls to suspend work-related conditionality and the possibility of sanctions for all claimants.
Writing on 25 March to the Work and Pensions Committee the Secretary of State, Thérèse Coffey said:
“…we will not be checking conditionality compliance regarding looking for and being available for work for the next three months. This means no sanctions should be applied for that reason.”
Regulations in force from 30 March provide that work-search requirements for UC and ‘New Style’ Jobseeker’s Allowance will not apply for three months. It is unclear whether sanctions might still be applied for other reasons, such as failing to meet work-preparation requirements.
What about benefits for self-employed people during the crisis?
Many self-employed people will be eligible for UC. Ordinarily, most self-employed UC claimants are subject to the ‘Minimum Income Floor’ (MIF).
This means that after they have been self-employed for a certain period their UC awards are calculated as if they earn the national minimum wage for the number of hours they are supposed to work. This is even if their actual income is lower than this.
Following concerns that this would disadvantage self-employed people unable to work because of the outbreak, the Budget announced a temporary suspension of the MIF for people directly affected by Covid-19. On 20 March the Chancellor went further, announcing that from 6 April the MIF will be suspended for all UC claimants for the duration of the outbreak.
Is any additional support available from local authorities and devolved administrations?
The Budget included a £500 million ‘hardship fund’ for local authorities in England to help them support vulnerable people during the outbreak.
On 24 March, guidance for local authorities in England clarified that the Government’s “strong expectation” is that this fund should be used to provide additional help to working-age people who receive council tax support.
Councils can: “establish their own approach to using the remaining grant to assist those in need,” which might include further council tax relief or additional support through Local Welfare or similar schemes.
The Scottish Government has provided £350 million for “welfare and wellbeing” in local communities, including a £95 million package for local authorities.
The Welsh Government has also provided £30 million for local authorities to deal with homelessness and school meals.
The Northern Ireland Department for Communities has issued new regulations which enable it to provide a discretionary support non-repayable grant to claimant struggling with living expenses as a result of Covid-19. Further announcements are expected.
Coronavirus Bill: Statutory Sick Pay & National Insurance Contributions, House of Commons Library, 20 March 2020
Understanding Universal Credit: Coronavirus and claiming benefits, Department for Work and Pensions
COVID-19: guidance for employees, GOV.UK, 24 March 2020
Benefits and coronavirus, Child Poverty Action Group
Coronavirus (COVID-19) resources, Rightsnet
Coronavirus publications, Resolution Foundation
Wages, welfare and wellbeing, The Labour Party, 20 March 2020
About the authors: Francis Hobson, Andrew Mackley and Steven Kennedy are researchers at the House of Commons Library, specialising in social security policy.