The latest information on benefits and the Job Retention Scheme. I will try to keep my blog updated with changes and other developments – so please check for more recent posts.


The following information is accurate as of 23 March 2020:

  • A new Job Retention Scheme that will provide a grant to employers to enable them to pay the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak. See next page for more information
  • All requirements to attend the JobCentre in person are suspended for at least 3 months, starting from Thursday 19th March 2020
  • JobCentres remain open, and will continue to support people who need it.


Statutory Sick Pay

  • Now payable from day 1 of sickness (rather than day 4).
  • As getting a fit note could be problematic, employers are urged to use their discretion about what evidence, if any, they ask for.
  • A system is now in operation whereby claimants who need one can get an ‘isolation note’ from the NHS 111 Online service.

New-Style Employment and Support Allowance

  • Payable from day 1 of sickness (rather than day 8)
  • Not need to produce a ‘fit note’ or ‘isolation note’.
  • Claimants will be treated as incapable for work

Universal Credit

  • Standard Allowance increase by £20 a week for 12 months- the main purpose behind this appears to be to give self-employed claimants the same basic level of income as SSP.
  • Local Housing Allowance (LHA) changes from 1st April – pay for at least 30% of market rates (We await further details but suspect this will mean a ‘re-set’ of LHA rates, which have generally been frozen since 2015. And it may include the lifting of the ‘upper limit’).
  • Minimum Income Floor (MIF) suspended for everyone affected by the economic impacts of coronavirus.
  • Claimants are not required to produce a ‘fit note’ or ‘isolation note’ if affected by Coronavirus.
  • Those who have contracted Coronavirus or are self-isolating are treated as having a Limited Capability for Work (LCW). This means mandatory work search and work availability requirements will be removed, and the person will be entitled to work allowance if treated as having LCW on date UC is assessed.
  • Claimants will not be required to attend the JobCentre.
  • Can receive an Advance Payment without having to physically attend a JobCentre.

Tax Credits

Standard rate is to increase by £20 a week.

Housing Benefit

Local Housing Allowance (LHA) changes from 1st Apri are the same as those being made to Universal Credit (see above).

Job Retention Scheme

On 20th March 2020 the government announced a new ‘Coronavirus Job Retention Scheme’ that aims to support businesses to help pay people’s wages.

Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the Coronavirus outbreak.

How it works

Employers will need to:

  • Designate affected employees as ‘furloughed workers,’ and notify each employee of this change.
  • Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (still in development)
  • HMRC will reimburse 80% of furloughed workers’ wage costs, up to a cap of £2,500 gross per month.

In practice, this means the employer will need to make the wage payment and then apply for a reimbursement. If the employer needs short term cash flow support, they may be eligible for a Coronavirus Business Interruption Loan.

The information published so far about the Job Retention Scheme suggests it will only apply to those employees who are not working due to the Coronavirus, to help safeguard their job. There therefore appears no system in place – apart from the benefit system – for those workers on reduced hours. This may change in the future.

People on zero-hours contracts

If a zero hour contract employee is on the PAYE system then they should be covered by the scheme, with the amount their employer will receive based on their regular earnings.

Gig economy workers

The gig economy is where the worker commonly uses an intermediary, such as an app or a website (for example Uber, Deliveroo and Yodel). The work is flexible, in that the worker can choose the hours they work and there is nothing forcing them to work certain times.

At the moment, many people in the gig economy are classed as self-employed and will submit a Self Assessment tax return so will not be covered by the Job Retention Scheme.

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