What sickness benefits can I get if I’m unable to work?

State and employer benefits are confusing because there are just so many different types of support to get your head around. It’s hard to keep on top of everything and really understand what you’re entitled to. This guide tells you everything you need to know, in simple terms.

What financial support can I get if I fall ill and become unable to work?

Many people overestimate the amount of financial support they would receive from the government or their employer if they couldn’t work because of an illness or disability, and although some of the amounts above look quite generous, there are a few things to be aware of:

Benefits levels may be too low:

Did you know that UK households spend on average £528.80 each week [1]? Creating an 80% gap between the amount of SSP you’d receive and the amount you may need to cover all of your household expenses

Benefits can be reduced:

• Universal Credit is means-tested, so your partner’s income and any savings you have will reduce the amount you receive

The qualification criteria are quite strict:

• You can only qualify for Universal Credit if your family earn below a certain level and have assets less than a particular value
• To qualify for PIP, you need to have an expectation that any difficulties will last for at least 12 months from when they began

If you’re worried about how you’d cover your regular outgoings if you fell ill and couldn’t work, and are also concerned about the level of state or employer support you’d receive, income protection insurance might be a good solution for you.

Income protection insurance is a product that replaces your income if you fall ill, or have an accident, and can’t work. It pays you a set monthly benefit amount and will continue to do so until you recover and return to work, your cover comes to an end, or you retire.

The good news is that neither your partner’s income, nor the savings you have, will impact the amount of money you receive from this type of insurance policy. Income protection insurance is available to most people and is a useful product if you want the security that you and the family will be looked after financially should the worst happen.

What is Income Protection?

Income protection insurance is designed to replace some of your monthly income (between 50%-70%), if you are unable to work due to illness or injury. It pays a tax-free monthly benefit until you recover and are able to return to work, your policy comes to an end, or you retire.  

Whether you're employed or self-employed, this allows you to continue paying the essential bills such as your mortgage or rent payment, even when you can’t go out to work.

You can also claim more than once on a policy - as many times as you need to, in fact. This sets it apart from critical illness insurance for example, as that provides a one-off lump sum upon your claim.

You can find out more about Income Protection, here.

What is Universal Credit?

Universal Credit was introduced in 2010 and groups six older government benefits into one. Those six benefits are:

• Income Support

• Employment and Support Allowance

• Jobseeker's Allowance

• Child Tax Credit

• Housing Benefit

• Working Tax Credit

Although it’s taken some time, Universal Credit is now available in all areas of the UK, and anybody who starts claiming benefits will receive Universal Credit rather than any of the older six benefits above.

How much will Universal Credit pay if I fall ill and become unable to work?

Universal Credit is a means-tested benefit, which means that the amount you get will depend on your household income, including your partner’s earnings, and any other money coming into the family home. The amount you receive is worked out each month and is made up of a standard allowance plus any additional amounts you’re entitled to.

The standard allowance is based on your age and whether you’re single or in a couple. The maximum amount you could receive as a standard allowance is £578.82 per month.

There is an additional amount which may be paid if you have a disability or health condition which limits your ability to work. You could receive up to £390.06 per month, but you would need to pass a work capability assessment which works out whether your mental or physical health impacts your ability to work.

There are a few other extra allowances which you may also be entitled to, for example if you have children or provide care for someone in the home.

It’s worth bearing in mind that the government may make a number of deductions from the amounts above to work out the final amount of money to pay you each month. The deductions will be based on your combined household income, savings and investments, to name just a few.

For more information on Universal Credit, visit: https://www.understandinguniversalcredit.gov.uk/

What is Personal Independence Payment?

Unlike Universal Credit, Personal Independence Payment (PIP) isn’t means-tested, so the amount you receive doesn’t depend on your household income. This benefit is designed to provide money to people who have a disability and need extra support. It’s for those who can’t do simple daily tasks like eating or washing without help from someone else, or for those who can’t easily move about.

You could receive up to £172.75 per week if you struggle to complete a number of daily tasks and can’t get around independently.

For more information on PIP, visit: https://www.gov.uk/pip

What is Statutory Sick Pay?

Statutory Sick Pay (SSP) is slightly different to Universal Credit and PIP as it’s paid by your employer, rather than the government. All employers are legally required to pay SSP to their staff if they’re too ill to work.

So, if you’re an eligible employee, you could receive £109.40 per week for up to 28 weeks if you fall ill and can’t work. In order to receive this financial support, you need to have been ill for more than 3 days in a row (including non-working days), and also need to be earning an average of at least £123 per week.

Of course, your employer may pay you more in terms of sick pay, but SSP is the absolute minimum that they can pay to you.
 
For more information on SSP, visit: https://www.gov.uk/statutory-sick-pay 

References:

[1] https://www.ons.gov.uk/
peoplepopulationandcommunity/
personalandhouseholdfinances/
expenditure/bulletins/
familyspendingintheuk/
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