Employment and Support Allowance (ESA) is a type of financial benefit that might be available if you have ‘limited capacity to work’, such as a health condition or disability which inhibits your ability to work.
It is intended to give you some financial stability while you’re unable to earn an income. It’s particularly useful if you’re a self-employed freelancer and don’t have an employer to pay Statutory Sick Pay when you need time off sick.
What is new style Employment and Support Allowance?
Most people who claim ESA now get what is called ‘new style ESA’, which replaced the previous income-based and contribution-based allowances.
It’s a contributory benefit, which means that you must have made sufficient National Insurance contributions or NI credits in last few years to receive it.
Employment and Support Allowance is the latest style of ESA.
- You can receive financial assistance to help you pay for your daily living costs
- Credits from Class 1 of National Insurance can be used to support State pensions and other benefits.
- Professional support if you’re able to return to work.
How much Employment and Support Allowance can I claim?
A new claim for the ESA can take several weeks, or even months, to be assessed, so you’ll normally be entitled to an ‘assessment rate’ of ESA until a decision has been made. Current assessment rates for new style ESA include:
- £67.20 per week for anybody under 25
- £84.80 per week for anybody 25 and over
Any money due from your assessment period is backdated if you are found eligible.
Assessment categorises those who are eligible for ESA into two groups: ‘work-related’ (those who will likely be able to work again) and ‘support’ (those who aren’t likely to work in the future).
New style ESA rate for these groups is currently:
- Work-related: up to £84.80
- Support: up to £128.85
Note: a private pension of more than £85 per week may impact how much you can receive in ESA.
Who is eligible to receive the New Style ESA?
You can qualify for Employment and support allowance if you are unemployed, employed or self-employed.
ESA is only available to those who meet certain requirements.
- Disability or Health Condition that limits the ability to perform your job
- Worked as an employee, or self-employed
- Age 16 and over
- The State Pension Age (you can learn more on GOV.UK).
- You can live in England, Wales or Scotland
- Paying enough National Insurance for the previous 2-3 tax year (including National Insurance credit)
Note: Even if you aren’t eligible for new style ESA right now, you may still be able to get National Insurance credits if you are unable to work. The NI credit you receive could help you to qualify for ESA in the future.
How can a free-lancer get Employment and Support Allowance (ESA)?
You can apply for ESA as a freelancer if you meet other requirements. It’s worth noting that if you have a full-time job as well as a self-employed side hustle (i.e., you freelance to supplement your PAYE salary), you can claim ESA but only for one type of income. You won’t be able to claim ESA on both employment and self-employment income at the same time.
How can I get ESA?
If you think you qualify for ESA and need support while you’re unable to work, you can apply via the GOV.UK website.
Make sure you’ve got the following to hand:
- Number of National Insurance
- Bank or building society account number and sort code (yours or somebody else’s if you don’t have your own)
- Your doctor’s name, address and contact details
- A note from your doctor (i.e., a ‘sick note’, ‘fit note’ or a ‘statement of fitness for work’)
- Date that your Statutory Pay Sick (SSP) will expire (if applicable).
You will receive a call from us to discuss the next step after you have submitted your application.
Am I able to continue working while claiming ESA Benefits?
The only way you can work while you claim Employment and Support allowance is if:
- Working less than 16 hour per week is not allowed.
- Aren’t earning more than £167 a week.
Jobcentre Plus will require you to record any hours that you work.
You can get ESA along with other benefits.
Some benefits are available while claiming Employment and Support Allowance. Others will be unavailable during this period.
You can claim Personal Independent Payments and Universal Credit simultaneously with the new ESA style.
Others choose both. Some choose ESA over Universal Credit due to the more frequent payments (every two weeks instead of monthly).
Your Universal Credit will be reduced if you claim ESA as well as Universal Credit at the same (and you’re eligible for both).
Normally, you cannot claim ESA along with Jobseekers allowance (JSA), income support or Statutory Sick pay (SSP). SSP does not apply to free-lancers who also have a job and are paid via the PAYE system.
If you are a freelancer who is also in employment, it’s worth noting that you can apply for new style ESA up to 3 months before your SSP is due to finish. ESA replaces Statutory sick pay once it ends.
What other options do I have?
Working for yourself is your sole source of income, so being sick can be a challenge. The way that ESA is structured can mean that it’s not that useful for shorter absences, so lots of self-employed freelancers build potential absences into their pricing structure.
Consider what time off you might need over the year for much-needed holidays or for short-term sickness, and factor this in to your fees so that there’s more of a buffer if anything does happen.
Self-employed Income Insurance is another option for freelancers to consider. This will protect them from longer term issues.
Our info hub has more information and advice for freelancers.
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