It is important that your clients know they are entitled to claim benefits in certain circumstances. Misfortune is part of life, and that is why the state system is there to support people.
In recent years, the nature of state benefits provided to individuals who become sick or disabled has changed significantly. Many clients will not know what they are entitled to receive or be aware of the complexity surrounding state benefits.
So, when discussing protection solutions, you need to have a solid understanding of state benefits, including how much might be payable and how long for. That way, you can have meaningful conversations with clients and more easily explain why they should consider protection.
Depending on how a client’s circumstances change, there are four different benefits that they may have some entitlement to:
- Statutory sick pay (SSP).
- Employment and support allowance (ESA).
- Universal credit.
- Personal independence payment (PIP).
SSP is paid by employers directly to employees, in the same way that their salary has been paid, with tax and national insurance deducted. To qualify for SSP, your client must:
- be classed as an employee and have done some work for their employer;
- earn an average of at least £123 a week; and
- have been ill for at least four days in a row – including non-working days.
They will not qualify if they have received the maximum amount of SSP, which is 28 weeks, or are getting statutory maternity pay.
When someone has regular periods of sickness, these may count as ‘linked’ if they last four or more days each or are eight weeks or less apart.
Your client will no longer be eligible for SSP if they have a continuous series of linked periods that last more than three years. However, if clients have more than one job, they may get SSP from each employer.
How much is payable
Employees can get £99.35 a week for up to 28 weeks from the fourth day that they are off work due to illness. If they have received SSP in the last eight weeks, which included a three-day waiting period, then this would count as linked.
Employers cannot pay employees less than the statutory amount but might pay more if they have a sick pay scheme (or ‘occupational scheme’). So make sure you check your client’s employment contract and their employers’ sickness absence policies.
If employees are not eligible or their SSP ends, they may qualify for ESA or universal credit.
ESA is payable to people, whether they are employed, self-employed or unemployed, who are:
- under state pension age;
- have a disability or health condition that affects how much they can work; or
- have paid enough national insurance contributions, usually in the last two to three years, through employment, self-employment or credits.
Your client will not receive ESA if they claim jobseeker’s allowance or SSP, but can apply for it up to three months before their SSP ends. They will then start receiving ESA payments, if they are eligible, as soon as their SSP payments stop.
If they already receive universal credit claimants can get ESA at the same time, but the universal credit payment will be reduced by the amount they get from ESA.
To qualify for ESA, it is necessary to undertake a work capability assessment, which determines whether they may return to work in the future or their condition is so severe that it would be unreasonable to expect them to engage in work-related activity.