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Mental health and money advice for COVID-19 outbreak

At Mental Health and Money advice, we support anyone who is struggling with their money as well as the impact of those financial worries affecting their mental health.

Before our service launched in 2017, our research highlighted four million people in the UK have both mental health and money problems, and a further four million are at risk because of their financial difficulties.

Due to recent events with COVID-19, these numbers are expected to rise as many people will find themselves needing to access the benefits systems when they have never had to before. Knowing where to start is the first step to taking control and planning.

Whilst focus is on people’s physical health at the moment, the fallout and dramatic changes will take a toll on people’s financial wellbeing as well as their mental health. We provide vital information and links to help provide support during the COVID-19 outbreak.

The situation is changing quickly, and we will continue to update this page as we get more information.

What can I do if my income has been reduced because of COVID-19?

If your income has reduced during the COVID-19 outbreak, the first step you should take is to complete a budget form. This will allow you to put down all of your incomings and outgoings to understand better how the reduction in income will affect you.

By filling in a budget form, you will understand how you can save money. This can be a stressful period, but it’s vital to help you manage your money and mental health. Once completed, the form will explain what steps you should take next.

How to look after your mental health if you have to take time off work because of COVID-19

If the COVID-19 outbreak has caused you to take time off work or resulted in your income being reduced, it can be extremely stressful. As a result, you may experience heightened anxiety, low mood or depression.

If your mental health has been affected by COVID-19, we recommend you read Rethink Mental Illness’ guide to managing your mental health during COVID-19, or try Every Mind Matters website for some self-help tips.

Statutory Sick Pay for COVID-19 self-isolation

Many people are expected to self-isolate and take-time off work sick due to the COVID-19. As a response, the UK government have changed the rules on Statutory Sick Pay (SSP).

SSP payment normally SSP payment with COVID 19
Wait four days before receiving an SSP payment. Now you receive SSP from the first day you are sick due to self-isolation for COVID-19 symptoms.

You will now receive Statutory Sick Pay from the first day you are off sick due to COVID-19. This includes people who have been advised to self-isolate, even if you haven’t presented any symptoms, for example, if you live with someone who has symptoms. You should check the NHS website to see if you need to self-isolate.

The new rule for SSP does not include people who are off sick for other reasons. For example, if the outbreak has caused you stress or anxiety, you still come under the old statutory sick pay rules.

Your employer may also pay you contractual sick pay which can be more than statutory sick pay. For example, you might continue to get your full payment, or you may get half pay, while off sick.

Furlough (inc parents) – Coronavirus Job Retention Scheme

The Government introduced the Coronavirus Job Retention Scheme to protect jobs and business during the lockdown.

This scheme has also introduced the term “furlough” where those who have been placed on standby from their employment will be paid 80% of their salaries, up to a maximum of £2,500 per month.

You must be paid via the PAYE scheme, and the payment will be backdated to 1st March with the first payments being made in April.

Everyone will react differently to being furloughed. It may be a welcome chance to look after children or provide care to vulnerable people. Or you may feel rejected or worried that you will not have a job to come back to. If possible, try and discuss your concerns with your employer.

You may also struggle with the isolation of not being connected with work; there are several emotional helplines that can help with this.

Recently the Government have updated their guidance on those eligible to be furloughed to include employees taking time off work due to childcare responsibilities. These changes included several amendments and clarifications, which included:

  • Apprentices can be furloughed and can also continue to train during this period.
  • Individuals can apply to the scheme if they employ people such as nannies, cleaners etc. as long as they are paid through PAYE and were on their payroll on or before 28th February 2020;
  • Companies such as Debenhams and Brighthouse who have been placed into administration can access the scheme.
  • Employees on fixed-term contracts such as those in the third sector can be furloughed. Their contracts can be extended or renewed during this period, and it will not break the terms of the scheme.

Other non-employee groups such as company directors, salaried members of Limited Liability Partnership and agency workers can claim grants if there are paid through PAYE.

Zero-Hours Contracts

Like many people in today’s economy, you may be on a zero-hour contract. If you have to self-isolate under current Government Guidance or you are off sick, you may be entitled to Statutory Sick Pay and should check with your employer if you are unsure.

Additionally, if you find that your hours have been cut or reduced dramatically in light of COVID-19, you can claim benefits such as Universal Credit.

Self-employed and COVID-19

For many people with mental health problems, self-employment can offer much-needed flexibility in term of when, where and how they work. However, the Coronavirus has caused many sectors such as hospitability to stop temporarily.

If you're self-employed, you may be eligible for a taxable grant worth up to 80% of your average earnings, up to a maximum of £2,500 per month.

To qualify, you need to:

  • Have an average trading profit of under £50,000 per year over the last three years,
  • Have a full year of accounts.

This scheme is available for sole traders and partnerships. However, if you became self-employed since April 2019, you are not eligible.

For those who are paid a salary or dividends through a company, you are not eligible for this scheme, but you may be eligible under the Coronavirus Job Retention Scheme if you are earning through PAYE.

If you qualify, HMRC will contact you and invite you to apply as long as you have submitted a tax return. If you have not filed your tax return for this year, you can do this online.

The payment will be paid as a lump sum. It will not be paid until June, so you may still need to claim Universal Credit or New Style Employment Support Allowance until then.

Additionally, self-employed claimants on Universal Credit who are required to stay at home or are ill as a result of the coronavirus will not have a Minimum Income Floor. This threshold will be temporarily removed and provide a cushion for income losses.

HMRC has launched a helpline for self-employed people and businesses concerned with paying taxes during this crisis. Companies may be eligible to receive financial support on a case by case basis. You can contact HMRC Time to Pay Support helpline on 0800 0159 559.

HMRC have stated they will waive any penalties related to late payments and interest in cases where self-employed or businesses have administrative problems in contacting HMRC or paying taxes as a result of COVID-19.

HMRC has proposed a delay to IR35 Tax Reforms. This is likely to affect freelancers as it will now be delayed until April 2021.

What other support is available to me if I am self-employed?

The UK Government has announced a temporary Coronavirus Business Interruption Loan Scheme administered by the British Business Bank which will provide support for businesses to access loans and overdrafts from over 40 accredited lenders.

Additional support for businesses include:

  • 12-month business rates relief for all retail, hospitality and leisure businesses.
  • Grants up to £10,000 for companies in receipt of Small Business Rate Relief or Rural Rate Relief.
  • Grants up to £25,000 for retail, hospitality and leisure business with rateable values between £15,000 and £51,000.

Scottish Government have announced over £2.2bn support package in place for Scottish Businesses. This includes:

  • Full year’s 100% non-domestic rates relief for retail, hospitality and tourism.
  • Grants up to £10,000 for small businesses in receipt of Small Business Bonus Scheme or Rural Relief.
  • Grants up to £25,000 for hospitality, leisure and retail properties which have a rateable value between £18,000 and £51,000.
  • 1.6% relief for ALL properties.
  • Local Authorities have been urged to relax planning rules to allow pubs and restaurants to operate as takeaways.
  • Deposit Return Scheme has been extended to July 2022.

Working in the Gig Economy

Variable income and unable to accomplish the desired hours (“being underemployed”) were already known hazards of the “gig” economy that can impact on people’s mental health.

Many “gig” workers often find they don’t meet the government schemes laid out to help other workers. Gig working can cover a range of activities from Uber taxi work to dog walking.

Unless it is agreed in your contract, you may not be entitled to Statutory Sick Pack, sick leave or holiday pay. You should immediately discuss matters with your employer as some are offering sick pay if you are self-isolating due to the Coronavirus.

You can claim other benefits which are available for self-employed people if you are eligible.

What if I’m a carer?

Caring for someone can often be both emotionally and physically tiring. Still, the Coronavirus can bring added worries over not spreading or picking up the virus.

In response to COVID-19 the government has made changes to Carer’s Allowance. The following changes start from March 30th 2020 and will be reviewed on September 30th 2020:

  • If you are an unpaid carer, you can continue to claim Carer’s Allowance if you have a temporary break in caring because the person you care for has Coronavirus or they have to self-isolate.
  • The 35 hours of care needed for Carers allowance also now includes emotional support over the phone and not just physically being with the person.

If you believe someone you look after may be at risk, NHS 111 can offer direct guidance through their online coronavirus helpline. If symptoms become severe Call 111 and let them know you’re a carer.

If you have received a “high risk” NHS letter or are caring for someone who has, you can register for further support here or by calling 0800 028 8327.

Read Rethink’s guide to caring for someone with a mental illness during Coronavirus.

What if I’m a working carer?

As an employee, you have a right in law to take a “reasonable” amount of time off work for an emergency (such as Coronavirus) involving someone who relies on you for care.

There is no fixed amount of time you can take off. The time is unpaid unless your employer is willing to give time off as a contractual right – check your contract. Acas has further information on this.

Visit the Carers Trust for further support and information relevant to where you live in the UK.

What happens if I lose my job to COVID-19?

Many people are facing potential job losses at this time as companies end contracts, especially for those who have been employed for less than two years.

To ensure your ex-employer has followed the statutory legal requirements, you can find further advice at The Advisory, Conciliation and Arbitration Service (ACAS).

If you have a mental illness, you might be worried that your employer is more likely to make you redundant because of your illness. If they did this, it could be discrimination. Find out more about discrimination and mental illness at the workplace.

If you are a member of a trade union, you can get advice and support from them. UNITE has already responded to several hospitality organisations who have made employees redundant due to COVID-19.

What benefits can I claim if I lose my job because of COVID-19?

This sudden change to your employment status could mean you have to claim benefits. The first thing you should do is use the Turn to Us online benefits checker to see what you can claim.

Universal Credit and COVID-19

Most people making a new claim for benefits will claim Universal Credit. Find out how to apply for Universal Credit online. You can also contact Universal Credit Helpline on 0800 328 5644.

If you are thinking of applying for Universal Credit, visit our dedicated Universal Credit and mental health guide.

Universal Credit will be available for those directly affected by COVID-19, or if you have to self-isolate.

The DWP have suspended attendance at local Job Centres, although you may have to discuss your claim over the phone. You will not be asked to provide a fit note if you are claiming Universal Credit because of COVID-19 and you should alert your work coach if this is the case as soon as possible.

Those who are claiming Universal Credit because they are sick with coronavirus or are having to self-isolate on the Government’s advice will be treated as having Limited Capability for Work and will be entitled to the work allowance.

There is a five-week wait before you will receive your first Universal Credit payment, but you can claim an Advance Payment when you apply. This will need to be paid back either by direct deductions from future Universal Credit Payments or your earnings.

From 6 April 2020, the government is increasing the standard allowance of Universal Credit by £20 per week.

In Scotland, there is a range of choices available to help manage your Universal Credit claim. This includes being paid more frequently and opting to have your housing payment made directly to your landlord.

New Style Employment & Support Allowance and COVID-19

You may be able to apply for New Style Employment and Support Allowance if you are:

  • Self-employed but having to self-isolate on Government advice and not working, or
  • You were employed but are no longer working as your employer has recently made you redundant, or you cannot work as you are self-isolating on Government advice.

Under these circumstances, you can claim immediately for New Style Employment & Support Allowance. Those directly affected by COVID-19 will be able to claim from the first day of sickness rather than the eighth day under previous rules.

This is assessed on your National Insurance Contributions, and you must have been working for most of the period between April 2017 and April 2019. You could receive up to £73.10 per week, which is paid fortnightly.

You will not be asked to provide a fit note if you are claiming this benefit because of COVID-19.
This can be claimed alongside Universal Credit although it is classed as an income and will determine how much Universal Credit you are eligible to receive as the amount of ESA you receive will reduce your Universal Credit claim by the same amount.

Additionally, if your partner or spouse has any income, this will be taken into account when claiming Universal Credit.

What if I have already made a claim for benefits?

The DWP has temporarily suspended all face-to-face assessments for health and disability-related benefits such as Personal Independent Payment and the Work Capability Assessment for Universal Credit and New Style Employment & Support Allowance.

This is to reduce exposure of COVID-19 to claimants who are at the most considerable risk and safeguard the health of individuals claiming disability-related benefits.

If you already have an assessment arranged, do not attend. The Assessment Provider will be in contact to discuss your appointment and your next steps.

You are still allowed to have someone attend with you, even if this is a telephone assessment. Your Assessment Provider must take into consideration the support you will require for your health condition and ensure adequate measures are put in place for this assistance.

If you have recently made a claim for Personal Independence Payment or any other benefits that require a health assessment and you are currently waiting on an assessment date, you don’t need to do anything. You will be contacted by telephone or letter to let you know what happens next.

Jobcentre appointments and work-related requirements

The DWP has suspended all appointments at Jobcentres. This means if you had any work-focused interviews or other meetings with your work coach planned, you no longer need to attend. You will continue to receive your benefits as usual.

Increase to Universal Credit and Working Tax Credit

From 6 April 2020, the government is increasing the standard allowance of Universal Credit and the basic element of working tax credit by £20 per week.

Benefit overpayments suspended

The DWP has announced that all recovery benefit-related overpayments, Social Fund Loans and Tax Credit debts will be suspended. This will not include Universal Credit Advance Payments which will continue to be collected from future Universal Credit payments or earnings (if your Universal Credit ends).

This suspension applies to those paying overpayments via direct deductions from ongoing benefits as well as those repaying under Direct Earnings Attachments.

This change means claimants’ benefits should increase during this crisis as any current deductions will be paused. This should happen automatically. If you have voluntarily agreed to repay your overpayments such as by direct debit or standing order, you should contact your bank to stop payments.

Local Authorities have also announced a suspension of Housing Benefit overpayments, as well as some Local Authorities, suspending all recovery action for social tenants and council tax. Please check your individual Local Authorities’ website for further information.

What if I am struggling to pay my rent and mortgage?

We would encourage you to continue to pay your rent and mortgage costs as much as you can do so but never to the detriment of essentials such as energy and food.

You should complete a budget to see what you can afford to pay. But during this difficult time, there is support in place for you if you will struggle to pay your housing costs.

Mortgages and COVID-19

Mortgage providers have agreed:

  • To give payment holidays on mortgages for those affected by COVID-19,
  • Not to start repossession proceedings for three months from the 19th March.

If you do take a mortgage payment holiday during this time, your monthly payments might increase when you start paying your mortgage again.

There may be other support you can get for your mortgage arrears, such as a reduced interest rate. Speak to your mortgage lender to find out what they are offering if you are struggling to pay your mortgage.

Corona (Scotland) Act 2020

The Scottish Government passed emergency legislation under the Coronavirus (Scotland) Act 2020 to mitigate the impact of COVID-19.

These measures are limited for the duration of the crisis and under the Act are set to expire on 30th September 2020. Scottish Ministers have allowed the legislation to be extended for two further periods of six months if required. Therefore, this legislation may be in place for a maximum of 18 months. 

The Act introduces increased protections for tenants and extension of the statutory moratorium. These are temporary measures which will expire automatically in six months but can be extended if required. 

Increased Tenant Protection 

Renters in Scotland will have increased protection against eviction by temporarily extending the notice period for all evictions up to six months. This applies to all Private and Social Landlords to help Scottish Tenants who may be facing difficulties as a result of the Coronavirus such as rent arrears.  

If you are a Scottish Tenant in this situation, you should seek support immediately to ensure payments to rent are prioritised.

There are exemptions, for example, instances of criminal activities or the landlord have to move into the property themselves where the notice period will be three months. 

Additionally, all private sector repossession case going before the First Tier Tribunal will be considered on a discretionary basis which gives the Tribunal more scope to consider the full circumstances of the tenant before reaching a decision. 

What other support might I get?

Scottish Government has provided an additional £350 million has been made available to councils, charities and community groups to enable support for individuals and communities. These measures include:

Increased Debtor Protection

A legal moratorium can act as a protection against creditors looking to take further action against you, such as earnings arrestment or making you bankrupt. It does not stop creditors applying to the court to obtain a decree (court order) nor stop them from applying interest, charges or fees. However, it will stop creditors from doing anything with their court order during the period of protection.

In Scotland, Statutory Moratorium is available for debtors who wish to have a period of protection to seek money advice and support with their debt. Before the new Act, this period was six weeks and has now been extended to six months. Moreover, the restriction on only being able to apply for one Statutory Moratorium in a 12-month rolling period has been lifted.

If you are ordinarily a resident in Scotland, you can apply for a Statutory Moratorium on the Accountant in Bankruptcy website. It is free to apply and easy to complete, although it is recommended you seek advice from a specialist money adviser before applying. The purpose of this protection is to allow you time to find appropriate support and have breathing spaced during this difficult time.

Once the Accountant in Bankruptcy processes your application, your details are added to their Register of Insolvencies. This is a public register accessible online and creditors should search the Register before taking action against you.

This doesn’t always happen in practice, and therefore you should contact your creditors or Sheriff Officers with a copy of the extract from Register. If action has been taken against you while you were in the protected period, the creditor on notification should reverse their actions and remove any fees applied to your debt.

If you are concerned about your details being available on the Register, please note that it is not easy to navigate and you need to know the name, address and date of birth to find someone. The information is only publicly available for six months and is removed at the end of this period.

Finally, for debtors under the Debt Arrangement Scheme will not have a Debt Payment Programme revoked due to missed payments that have resulted from the coronavirus crisis.

FCA updates

The Financial Conduct Authority has introduced further UK-wide measures to support people experiencing financial hardship due to COVID-19. These measures are set to come into force on 9th April and will include:

Banks and building societies must not charge interest on the first £500 of authorised overdrafts for three months.

Lenders and creditors should offer temporary repayment freezes on credit cards, store cards and loans for up to three months. This doesn’t necessarily freeze interest, charges or fees and is merely a payment break.

Furthermore, Credit Reports will not be affected as all three main UK credit reference agencies (Experian, Equifax and Transunion) have agreed that arranged temporary payment holidays will not affect your credit score.

New missed payments or agreed payment holidays will not be shown although any existing arrears will still show on your report. These must be agreed by your lender to become an authorised changed. If you do not receive approval from your lenders, this will be an unauthorised change and will negatively affect your credit score.

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