Taking time off work for health reasons is worrying enough, without adding financial pressure into the mix. Most people who work full or part time for an employer receive Statutory Sick Pay (SSP), but if you’re self-employed this unfortunately isn’t an option.
The good news though is that you may be able to claim other benefits whilst self-employed if you can’t work due to illness, injury, or disability.
What sickness benefits can I claim if I’m self-employed?
There are some sickness benefits you may be able to claim if you’re self-employed and struggling to work. A good place to start is the benefits section of the Gov.uk website as you’ll find the most up-to date information. However, as a guide we’ve listed some of the most commonly claimed ones.
Employment and Support Allowance
The Employment and Support Allowance (ESA) can be claimed by people who are self-employed, unemployed, classed as a student, or employed but not eligible for Statutory Sick Pay (SSP).
Will I have to stop working?
The good news for self-employed workers is that receiving ESA doesn’t have to mean putting your business on hold. If your illness allows you to continue work, but restricts or reduces your ability to do so, you may still be eligible.
Am I eligible for the Employment and Support Allowance?
To be eligible for Employment and Support Allowance (ESA) you be younger than state pension age, older than 16, and have a ‘fit note’ from your doctor. If you already get Statutory Sick Pay or Jobseeker’s Allowance, you will not be able to get the Employment and Support Allowance at the same time.
How do I apply for Employment and Support Allowance?
You can apply online or via your local Jobcentre Plus. Part of the assessment process involves demonstrating that you are unable to work because of your illness, injury, or disability.
You might need to complete a Work Capability Assessment questionnaire, or have a medical assessment at an in-person appointment. If you have been diagnosed with a terminal illness, then you will not have to be assessed.
Personal Independence Payment (PIP)
PIP is a benefit that can be paid to people who find it harder to get around, or who need extra care due to a long-term health condition or disability. It consists of two components: mobility, and daily living. The mobility component is intended to help with getting about, and the daily living element is for extra help with day-to-day activities such as washing or dressing.
You can claim for PIP from the ages of 16 to 64, even if you are working. Read up on Personal Independence Payments and how to claim on Gov.uk/PIP
Online accountancy services
Get a quote and see how much you could be saving!
Get an instant quote
Universal Credit for self-employed people
You may be able to claim Universal Credit if you’re self-employed. This can help you meet your costs if you’re on a low income or are looking to grow your business. To claim Universal Credit, you’ll need to show that:
Your main source of income is through self-employment
You regularly work as self-employed
You expect to make a profit
You have records relating to your self-employed work, such as receipts, invoices, and accounts information
The above evidence all shows that you’re ‘gainfully self-employed’ which means you won’t be expected to look for additional work on top.
Bear in mind though, it will be assumed that you are earning roughly the same as someone in a similar employed job.
Often this is based on what someone your age would earn if you received National Minimum Wage for the hours you work. This amount is known as the Minimum Income Floor (MIF).
How does the Minimum Income Floor work?
Universal Credit will not make up the difference if you earn under the Minimum Income Floor (MIF). This means you might need to top up your income with extra work if possible. However, if you earn over the Minimum Income Floor (MIF), your actual earnings will be used to work out your Universal Credit payment.
If you have only recently become self-employed, the Minimum Income Floor will not apply for 12 months, so you will need to be able to prove that you’re building your business and/or that you have a fit note from your doctor explaining any illness or injury. As part of the process, you’ll be assigned a Work Coach who will guide you.
If you are able to work at all around your illness, disability, or injury, you will need to report anything you earn to the Department for Work and Pensions each month.
The Gov.uk website has all the information you need about universal credit and how to apply. See Gov.uk/universal-credit.
What else can I do to protect myself?
Unfortunately, we all have times in life when we get sick or hurt ourselves. It’s just one of those annoying things that happen. But with the cost of living high, the thought of limited or no income when you’re self-employed can be terrifying.
Wherever possible, it’s a good idea to build a safety net of funds which you can pay yourself if you ever can’t work. It’s definitely something to consider when deciding your pricing structure (which should also factor in you having some time off for holidays!).
You might also consider hiring freelancers to help you fulfil any existing contracts or projects. Although there will be a cost involved, it may help to avoid disappointed customers.
There are also different types of business insurance, like income protection insurance. Outside of your business, you could also think about critical illness cover (which can help if you’ve got a mortgage, for example).
Arming yourself with the facts and coming up with a plan ahead of time can make a huge difference to both your finances and your stress levels.
Need online accountancy support for your self-employed business? Talk to one of our advisors on 020 3355 4047, or get an instant online quote.
Want to learn more?
Subscribe to our newsletter to get accounting tips like this right to your inbox
About The Author
A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.