In an interview with BBC News on Tuesday 3rd March 2020 Kevin Poulter, a legal expert with the company Freeths explained what implications the Coronavirus could have to our income.
The biggest risk to our incomes is not being able to work. There are two main scenarios as to why this is likely to come about in the wake of the Coronavirus;
1. Self quarantine through fear of contracting or spreading the Coronavirus - this may be through personal choice or because an employer shuts down it's business or place of work which may be forced or through choice. In either scenario there is no legal obligation for an employer to pay staff sick pay unless they have medically diagnosed as 'sick'. Some employers may provide staff with pay still or offer working from home if feasible, but this may not be possible for all employees and although the government has indicated that they consider self isolation in the same way as being sick, it is yet to be seen whether the £94.25 per week Statutory Sick Pay (SSP) will actually be paid to individuals following the initial 3 day period where sick pay cannot be claimed...and in reality can most people go from having a full time or part time working salary to £94.25 per week anyway? A scary thought.
2. Unable to work due to contracting Coronavirus - this is a genuine illness and as such an employer has a responsibility to pay it's employee(s) their contracted sick pay in this scenario. For employees without sick pay written into their contract they will need to go through the lengthy process of applying for the government's SSP of £94.25 which as we mentioned is not an ideal scenario. (Find out more about SSP at https://www.gov.uk/statutory-sick-pay/how-to-claim).
For those of us that are self employed (Including myself) this is a scary situation. We are not entitled to sick pay from an employer and for many of us if we don't work we don't get paid, it's as simple as that!
What can we do?
The best thing that both employed and self employed workers can do is to ensure that they have an income protection policy in place that will provide a replacement income if they are unable to work due to illness and to also put some of their current income to one side in a savings or current account for emergencies.
For those working for an employer an income protection plan can be set up to begin as soon as your sick pay stops and there are a number of options that will allow the cover to start whilst you are receiving sick pay. For the self employed income protection can begin from the first day you are unable to work due to illness or injury or from a starting point after the initial diagnosis from your GP eg. 1 week, 4 weeks, 8 weeks.
Another real risk for employed workers to consider is Redundancy. For companies forced to closed their doors or stop trading this could spell the beginning of job cuts. Redundancy / Unemployment insurance is available and should be a real consideration not just during the current situation around Coronavirus, but also in the general post Brexit economic climate.
ASure Financial can assist you with all of your income protection and unemployment insurance needs. Please contact us for further information and to arrange an appointment with one of our insurance specialists. BeASured