Everything You Need To Know About The New Tier System

Earlier this month the government announced a new ‘tier’ system of local COVID Alert Levels for England. Each tier comes with a set of rules, categorised by three alert statuses: Medium, High and Very High. Scotland has its own five tier system and Wales is currently in the midst of a 17 day ‘firebreak’ lockdown period.

Although these rules vary depending on what part of the UK and Northern Ireland you live in and also at the discretion of your local authority, the question is: if you are affected what financial support is available?

If you’re a Financial Wellness Group Debt Management Plan, IVA, Trust Deed or Debt Arrangement Scheme customer who has been financially impacted by these restrictions, please get in touch and we would be happy to support you through it.

What financial support is available?

The strict conditions mean that many businesses and workers (particularly those in the hospitality sector) are being hit by forced closures. If you’re one of the people affected, here’s what you could be entitled to:

If you’re working fewer hours than usual because your place of work has been affected by coronavirus: you may be able to get a top-up of your wages from the Job Support Scheme. Here’s how that will work:

• Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, you will be paid two-thirds of your usual wage. Your employer will have to contribute 5%, and the government will contribute up to 61.67%.
• For example, if you are normally paid an average of £1,100 per month, under the Job Support Scheme you will take home at least £807 a month.
• To be eligible, employees must be working at least 20% of their usual hours, and have been on the payroll since on or before the 23rd September 2020.
• The level of top up grant from the government will be calculated based on the employee’s usual salary, capped at £1,541.75 per month.
• Although the scheme is designed to replace the furlough scheme (which come to an end on 31^st October), businesses can be eligible whether or not they furloughed employees.
• All small and medium-sized businesses are eligible. Larger businesses can take part, but they must prove they’ve been adversely affected by coronavirus, and can’t pay dividends to their shareholders while using the scheme.

If your place of work is forced to close altogether: you may be able to have part of your wages paid under a part of the Job Support Scheme called JSS Closed: take a look at our blog, Help From The Job Support Scheme If Your Place Of Work Shuts Down, for more information.

If you’re self-employed: the Self-Employed Income Support Scheme has now been extended for a further two taxable grants: from November to January, and then from February to April. We’re awaiting information on when applications will open: we’ll share more details when we have them. Here’s what we know so far:

• The third (November-January) grant will cover 40% of trading profits for three months, capped at £3,750. It’ll be paid in a single instalment. We don’t yet know how much the fourth grant (February-April) will pay. The Government has also reserved the right to change the eligibility criteria for the fourth grant.
• As with the previous rounds of grants, the third and fourth will usually be based on an average of your profits as reported in your tax returns for 2016/17, 2017/18 and 2018/19.
• Only those eligible for the current SEISS can apply:
  • you must have filed a tax return for 2018/19
  • you must earn more than 50% of your total income from self-employment
  • your average trading profit must be no more than £50,000/year
  • and you need to have been adversely affected by coronavirus.

If your business has been affected: your business may be entitled to support provided through your local authority. Businesses in Tier 3 areas will qualify for greater support whether they are closed (up to £3,000/month) or open.

If you have lost income but you’re not entitled to any of the support above:

• Use our free, independent benefit checker to see if you can claim any additional support.
• If you’ve been made redundant, take a look at our redundancy guide.
• If you’re one of our customers on a Debt Management Plan, IVA, Trust Deed or DAS, let us know as soon as your financial situation changes, so we can make sure you’re not paying more than you can afford into your debt solution. You can find details on how to contact us here.

Have you been financially impacted by the tier system? If you are struggling to manage your debt or just need some financial advice, contact us on 0161 804 5464 to see if we can help you.