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If a person is employed and is off work sick for four or more consecutive days, they will be paid Statutory Sick Pay by their employer. The benefit is paid for up to 28 weeks. However, if you are self employed you aren’t entitled to receive Statutory Sick Pay. You may be entitled to claim Employment and Support Allowance instead.

If you are under the state pension age and self employed, you may qualify for Employment and Support Allowance if you satisfy specified conditions. You must have a disability or illness that has prevented you from working for at least four consecutive days, which includes public holidays and weekends. You may have been unable to work for two or more days out of seven days that run consecutively, or you may be receiving special medical treatment.

There are two different types of Employment and Support Allowance; Contribution based and income related. If you have paid sufficient National Insurance Contributions, Class 2 for self employed people, you may be awarded the contribution based ESA. If you have less than £16,000 in savings and any partner or civil partner works less than 24 hours a week, you may be entitled to income based Employment and Support Allowance if you haven’t paid enough National Insurance Contributions.

There are two phases of Employment and Support Allowance, the assessment phase and the main phase. While you are in the assessment phase which lasts for the first 13 weeks of your claim, you will receive the basic payment. During this phase the Work Capability Assessment will be carried out to determine whether you are capable of working. If the Work Capability Assessment does indicate that you aren’t capable of working, from week 14 you will be in the main phase. An additional payment will be made during this phase in addition to the basic rate.

Contribution based Employment and Support Allowance is taxable, so you may pay tax depending on your income. For the 2011-12 tax year, you may have up to £7475 a year without paying tax. Income based Employment and Support Allowance isn’t taxable. If you have other income, like an occupational pension you may have to pay tax on the Employment and Support Allowance. However, if you claim contribution based Employment and Support Allowance, any pension received which exceeds £85 a week will result in your ESA being reduced by half of the excess. Income based ESA will take any pension amount into consideration, regardless of how much you receive.

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