Being self-employed means that you’re not entitled to Statutory Sick Pay for injury or for illness. If you’re injured and can’t work, or must reduce your working hours, you could lose some (or all) of your income.
If you’re self-employed and temporarily unable to work due to injury, you might be entitled to Employment and Support Allowance (ESA). You won’t be entitled to Statutory Sick Pay (SSP). An insurance policy may provide further protection in case you are injured.
Self-employed injury benefits might help you keep your head above water, but you’ll need to claim Employment and Support Allowance instead. You can protect your own income with some form of income protection insurance as well.
Read on to find out more about self-employed injury benefits.
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Self-employment comes with many benefits to your work/life balance, but also with several drawbacks that need to be carefully considered. If you’re self-employed, you’ve no employer to help if you’re injured and can’t work.
Injury can put you out of action. Small injuries might stop you working for a few days, whilst larger ones affect you for life. Injuries might mean that you’re unable to work, and when you’re self-employed, a lack of work means a lack of money coming in.
As a self-employed person, being out of work means you’ll need to rely on your savings. You might also want to look at self-employed injury benefits. Claiming benefits won’t be ideal, but could provide essential cash to help with your bills and expenses. Keeping food on the table may require you to ask for government assistance.
If you’ve paid into the system and have made regular National Insurance contributions, you’ll have access to more government benefits than someone that hasn’t contributed. Even without a National Insurance contribution history, you may be entitled to some government benefits that can bring money into your bank account.
If you’re self-employed, you can’t get Statutory Sick Pay from employers. Instead, you’ll need to make a claim for Employment and Support Allowance. Employment and Support Allowance (ESA) is unlikely to cover your usual costs, or come close, but does provide some minimal protection if you’re injured and unable to work.
During the first 13 weeks of claiming ESA, you’ll be in their assessment period. Throughout this period, you’ll be paid less whilst your claim is being assessed. Under 25s get a maximum payment of just under £60 per week, whilst those over 25 get just under £75.
Once your claim has been assessed, if it’s approved, you’ll get just under £75 weekly regardless of your age. If your injury means that you’re unlikely to work again, this goes up to just under £115 per week.
If for any reason, the assessment period lasts longer than 13 weeks, you’ll continue getting the assessment rate until the review is complete. If you’re then owed money once the assessment has been carried out, you’ll get backdated payments.
Employment and Support Allowance is paid every two weeks, straight into your bank, so there’s no need to keep claiming it once it is set up. It’s a tax-free benefit, so you don’t need to worry about setting some of this cash aside.
To be entitled to Employment and Support Allowance, you must have been making National Insurance contributions. You should have made these consistently for at least the previous two years. National Insurance credits can also count.
If you’re not currently earning, as well as ESA you may get Universal Credit. You’ll need to provide evidence of earning and should supply these details every month. You can’t get Universal Credit if you or your partner have savings of over £16,000.
A single claimant under 25 will get a little over £340 per month. Over 25s get slightly more, with just under £410 per month in Universal Credit. You may also receive a bit more money if you have at least one dependent child.
If your injury is expected to have an impact for at least one year, you may be entitled to Personal Injury Payment. PIP can be claimed after three months have passed if you’re struggling to carry out your usual daily tasks. You’ll receive somewhere between £23 and £152 per week, helping to fund any extra support you might need for your daily living.
Government benefits are unlikely to be enough if you’re injured whilst self-employed.
At best, most people should expect to receive £75 a week ESA plus £410 per month through Universal Credit. That provides a total monthly income of no more than £800. Whilst many people have some savings to help, a long-term injury might cause problems if you relied on self-employed income.
For many self-employed people, government benefits will only cover the essentials. Often, they won’t even do that. That’s why it’s wise to have contingency plans to fall back on if you are injured.
Try to build your savings whilst you’re earning, so you’ve got some spare money if you need it. Savings will enable you to take time off work for any reason that you might need. We can’t predict injuries, nor plan ahead for illness, so one of the very best things you can do is make sure you’ve got some savings set aside.
There are other ways to protect your self-employment income. In fact, there are insurance policies designed exactly for this. Paying for insurance takes some of your money every month whilst you’re working, but if you’re injured and can’t work, then you’ll be very grateful that you made a monthly contribution.
The cost of your income protection insurance will likely be something between £30 and £50 per month, though premiums will vary based on the level of cover that you decide you’ll need. Also be prepared to pay a bit more for insurance if you have a history of health problems, or if you’re older as this will increase your likelihood of illness or injury.
Income protection insurance is a great idea if you’re self-employed. You can claim on this insurance if you’re out of work due to an injury or illness. Usually, income protection is paid every month whilst you’re unable to work, helping to boost your bank balance and cover your usual costs.
With income protection insurance, self-employed people typically keep getting up to 70% of their usual monthly earnings. This can be very beneficial when government benefits are low in value and can be hard to access, and when combined with ESA, you may be able to recover something that approaches a typical monthly salary.
Look out for deferred periods. Many insurers won’t start paying out as soon as you’re unable to work. Often, you’ll wait between 1 and 3 months for your insurance income to kick in. As with any insurance policy or financial product, it’s always good to check the small print before you decide to commit.
Our trusted financial partners can help with information about income protection insurance, as well as details about claiming self-employed injury benefits. If you’ve been injured while working and you’re self-employed, just click below and we’ll look at the options available to you.
It’s also worth reading our guides to claiming personal injury compensation if you’ve been hurt and it wasn’t your fault. You could claim for your personal injury, with a lump sum figure that helps you to keep paying your bills.
If your injury was caused by the negligence of a third party, then you may well be able to claim compensation for your injuries and impact on your income. There is a general misconception that because you are self-employed, you are somehow not entitled to the same legal protection as anybody else. This is simply wrong.
When pursuing compensation for injuries caused by another party, you’ll often come across the term tort claim. It matters not whether you are employed by a company or self-employed; if you were injured as a consequence of the actions of somebody else, then this may be deemed a tort.
This effectively means that you can pursue compensation which for a self-employed person can be very important.
As a self-employed individual, it is probably best to pursue your claim for compensation as soon as possible. If you can’t work, this could significantly reduce your household income, potentially causing all sorts of problems. So, the first thing to do is gather evidence which might include:-
The key to any successful personal injury claim is, first of all, to prove negligence on behalf of the party who caused the accident. Once you have proved negligence, you can then move on to claiming compensation.
In theory, you can pursue a claim yourself, but many claimants prefer to seek the help of a claims management company. As a self-employed individual, with limited income due to the accident, you may well have the opportunity to appoint a claims management company on a “no win no fee” arrangement.
However, first of all, they will review your evidence and details of your case. If they believe you have a minimum 60% chance of success, they will likely offer to take on your case on a “no win no fee” arrangement.
As part of a “no win no fee” arrangement, your claims management company will negotiate a success fee which is effectively a share of any compensation received. As you are effectively indemnified from any costs incurred by the claims management company when pursuing your case, many people believe this is a fair arrangement. The typical success fee is around 25%, although it will vary from case to case.
There are two particular types of damages to which you may well be entitled to, known as general damages and special damages.
General damages are financial compensation for your pain and suffering. Any award will be directly related to the severity of the injury and the pain and suffering caused. There are industry guidelines with regards to general damages, so these are pretty much set in stone, with a degree of discretion.
As self-employed individual special damage could be significantly greater than any level of general damages. Special damages relate to the loss of income, costs incurred with medical care, future medical costs, renovations to, for example, your house and even loss of bonuses and pension contributions.
If you have a successful business, the level of special damages could be significant. In theory, there is no limit to the level of special damages which a court can award.
By far and away, the vast majority of personal injury compensation claims are settled out of court, if negligence is proven and accepted. There will be occasions where you may need to go to court if there is some dispute regarding negligence or the level of compensation.
As a self-employed individual, it is important to address these issues as soon as possible. In some cases, you may be able to request an interim payment, to help you financially, when negligence has been accepted, but damages have not yet been agreed.
Here at Money Savings Advice, we have partnered with some of the UK’s leading Personal Injury Claims management companies. They have already helped thousands of people claim compensation for injuries they have incurred, and they can do the same for you.
Choosing an independent claims management company means they won’t proceed with a claim unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these claim management companies who can help you make a compensation claim, then click on the below and answer the very simple questions.
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