If you are self-employed and think you have no chance of getting income support, your concerns could be misplaced. You could still be entitled to income support, but just with different options to regular employees.
This article aims to give you an overview of income support for the self-employed so that you will find it easier to come by.
Employment Support Allowance (ESA)
Being self-employed means that you are ineligible for Statutory Sick Pay. For self-employed people that fall sick and are unable to work, ESA is there to help you. You are eligible for ESA in the following circumstances:
- You are prevented from working due to an illness or disability.
- You are in isolation due to COVID-19 (this requires an NHS-issued isolation note)
- You are shielding.
If you have been forced into isolation due to Test & Trace, you may qualify for a one-off payment of £500 if you are already claiming other benefits. If you are not receiving other benefits, you could be eligible for a grant. However, this grant will probably not be sufficient to cover the cost of what you lose due to being isolated.
SEISS (Self-Employment Income Support Scheme)
SEISS is an initiative established by the UK government to provide assistance to businesses affected by the coronavirus. It is relatively straightforward in the way it works, and all you need to do is show that your business suffered due to the virus.
The window for applications is between November 2020 and January 2021. Provide proof of the negative impact on your business, and you can apply for a cash grant through the government website.
You can receive up to 20% of your monthly profit, based on an average taken over three months, up to a maximum payment of £1,875. This maximum figure is regardless of whether your monthly profits exceed this figure.
Conditions Under Which You Can Apply For SEISS
- You’ve already submitted a tax return for 2018/2019.
- Self-employment accounts for at least half your income.
- You intend to continue trading, even if coronavirus restrictions curtail your business.
- Your annual trading profit is £50,000 or less.
Regardless of having previously applied for a previous SEISS grant, you can still apply for the current one. If you have any doubts about whether you can apply for a SEISS grant, you should contact HMRC.
You may be entitled to Universal Credit, even if you already qualify for SEISS. Universal Credit is designed to assist you with paying essential living costs. You may be eligible for Universal Credit under the following conditions:
- Reside in the UK.
- Have savings under £16,000.
- You are over 18 years of age and below the state pension age.
Universal Credit payments usually get issued once per month, unless you live in Scotland when it can be paid every two weeks.
How Much Can You Receive From Universal Credits?
To receive Universal Credits, you’ll need to report your income to HMRC every month. You should also include your expenses in this report, including equipment, tools, travel costs, etc. HMRC will use this report to assess what level of Universal Credits you can receive. In some circumstances, you might be able to receive an advance payment of your first Universal Credit payment.
Other Income Support for the Self-Employed
- Maternity Allowance. If you are a self-employed pregnant woman, you can apply for Maternity Allowance after 26 weeks of pregnancy.
- Bounce Back Loans. This scheme allows you to borrow up to £50,000 to help you with income support. However, it is a loan, so it needs to be paid back eventually.
Other Income Sources
Even if you don’t qualify for any of the income support detailed above, there are still other ways of getting some income. Starting a side hustle or selling some of your unused stuff are a couple of ways to make a little extra cash.
If you are struggling financially, you should try to resolve the issue as soon as possible. Citizens Advice can give you some free financial advice. If you think you might miss any repayments, contact your lenders immediately, and discuss a workable payment plan.
Hopefully, if you’re self-employed and looking to get income support, this article will help you find it.