When you work for an employer and fall ill, you can claim Statutory Sick Pay (SSP) to ensure you are still receiving an income while you recover.
If you are self-employed you are unable to receive SSP as you have no employer to claim it from. However, it may be possible to claim Employment and Support Allowance (ESA) to help you until you are able to get back to work.
ESA is designed to provide people with financial support if they are unable to work or personalised help so that they can work if able.
If you are successful with your claim, you will be put into one of two groups:
- The work-related activity group (WRAG), where you must attend regular interviews with an adviser who will help you with your job goals and improving your skills.
- Or the support group (SG), where you do not need to attend any interviews, however a personal adviser is available. This group is normally for those with more severe disabilities.
How much can you get by claiming ESA?
After you make your claim, you are normally given an “assessment rate” of income for thirteen weeks. This is up to £57.90 per week if you are under twenty five and up to £73.10 per week if you are older.
If your claim is successful the amount you can receive a week increases depending on which group you are allocated to. Those in the WRAG can earn a rate up to £102.15, while those in the SG can receive up to £109.30.
There are also two types of ESA that can be received. The first is contribution based, which means it is dependant on the National Insurance Contributions (NICs) you have paid. The second is income based, which you can receive if you are low on income.
The contribution based ESA lasts for one year for WRAG members. You can however reapply for the ESA at least twelve weeks after the income ceases. Whether your next application is successful is dependant on the NICs you’ve made in the past two to three years or if you are moved into the SG.
If you are in the SG there is no time limit to how long you can claim the ESA.
The income based ESA can be claimed if you cannot claim the contribution based ESA. It also has no time limit as the amount you receive is dependant on your circumstances.
SG members with income based ESA can also receive an enhanced disability premium of £15.75 per week. There is also a severe disability premium that may be claimed for £61.85 per week.
Can ESA be reduced?
Payments can be reduced if you do not comply with the rules of your ESA, such as attending interviews or completing work-related activities. This can be in effect for up to four weeks after you correct the issue.
You should receive a “sanction letter” if this happens and you must tell your adviser if you have a good reason. Afterwards you will receive a second letter saying whether or not they are reducing your ESA.
If you claim housing benefits or council tax reductions, you should contact your local council straight away to see how to continue receiving support.
There is also a benefit cap on total benefits individuals between sixteen and sixty can receive, this does not apply to SG members.
If you are unable to afford basic necessities due to having your income based ESA reduced you can claim hardship payments. Usually this will be a payment of around 60% of your ESA.
You must be eighteen or over to claim hardship payments and be unable to pay for rent, heat, for or other basic needs for you or your children.
All money received from ESA is paid into an account like your personal bank account.
What makes someone eligible for ESA?
You can receive ESA if you are unable to work due to illness or disability. Other requirements are that you are under the state pension age, not receiving SSP or Maternity pay and not receiving Jobseeker’s Allowance.
You can apply for ESA if you are self-employed, employed, unemployed or a student on Disability Living Allowance or Personal Independence Payment.
While your claim is being processed you will need to have a work capability assessment. You will receive a letter telling you what to do for this.
Working with ESA
Normally you would expect working to prevent you from claiming ESA, however there are some cases where working will not impact your ESA. This is usually if you earn up to £20 a week or work less than sixteen hours a week and earn up to £107.52 per week for up to fifty-two weeks. If you are in the SG, there is no fifty-two week limit. This is known as “permitted work”.
You can also do “supported permitted work” which must be supervised by the local council or a voluntary organisation that helps disabled people get back to work. You can earn up to £107.50 per week and there is no limit on the hours you work per week or how long you work for.
If you start doing supported permitted work you must inform the department of work and pensions, who will ask you to complete a form PW1 and return to them. Any volunteer work must be reported, but normally will not affect your ESA.
ESA can also be affected by you and your partner’s overall income, savings if they are over £6,000 and any pension income you receive. You will not be able to receive ESA if you have savings that exceed £16,000. Those claiming Universal Credit will also be unable to claim.
You can claim ESA by calling 0800 055 6688 or filling in a form ESA1 and either posting or taking it into your local Jobcentre Plus office. While claiming you will need your:
- National insurance number.
- Medical certificate.
- GP’s address and phone number.
- Home and mobile telephone numbers.
- Mortgage or landlord details.
- Council tax bill.
- Employer’s address, telephone number and dates of employment or last day worked.
- Bank account details.
- Details of any other money you are getting. For example, benefits or sick pay.
HM Revenue and Customs has more information that can be found here.
If you would like more information regarding the above, or with being self-employed in general, please do not hesitate to contact us.