20th Nov 2024
Reading Time: 5 minutes
Updated 20/11/2024
It’s important to reassess how you’re make money if you suddenly become disabled. You may be able to do what you’ve always done, or your change in circumstances could force a change in career.
Thinking about money might be the last thing you want to do when you suffer a life changing event. But eventually you will need to consider your options. Then work out how long-term sickness and disability will affect your finances and what help you may be eligible to.
It is also worth noting that being disabled can add an average of £1010 a month to living expenses in some cases – so you need to find ways to make more than when you’re working sometimes.
Here is our advice:
Get everything in order
Start by asking gathering all the essential documents you may need. These must include your employment details and National Insurance number.
If you have private health insurance and are using it for your treatment, you’ll need your membership details. Don’t forget to speak to your insurer before starting treatment to make sure it will be covered by your policy.
If you have income protection and/or critical illness insurance, now is the time to inform them of your circumstances.
Support groups
Most illnesses and conditions have support groups. These groups can advise on emotional and financial matters, including support available for both you and your loved ones.
Hospitals often have reduced price parking for visitors of seriously ill patients. For out patient appointments, you can usually park for free if you have a Blue Badge, too. Hospitals must publish their parking prices clearly online.
The hospital will not discharge you until they are satisfied you have a safe and accessible environment to return to. Your home will be assessed by an Occupational Therapist, if necessary. They will advise on any adjustments needed for you to live at home safely and comfortably. The NHS can provide some equipment and your local authority may give you a grant to help with the cost.
Sick pay
Regularly inform your employer of your condition and progress if returning to work is the plan. If you’re off work for more than seven days your employer will need a letter from the hospital or your GP. These used to be called sick notes but it are now called fit notes. Your fit note may include information such as when your doctor expects you to be ready to return to work and if that will need to be a phased return or with adjustments in place.
If you’re unable to return to work for longer than a month, you are considered to be long-term sick. In this case, you are still entitled to accrue annual leave.
You may be entitled to full sick pay for a set amount of time; your employment contract or employee handbook will explain the details for your workplace. If you are not entitled to sick pay through work, then you can claim Statutory Sick Pay (SSP). Workers, including agency staff, are paid this by their employer and are entitled to receive it if they have been sick for more than three days in a row (including non-working days such as weekends or days they are not scheduled for shift work). Or if they earn at least more than £123 before tax per week, and have informed their employer that they are sick.
In total, Statutory Sick Pay lasts for up to 28 weeks and is £116.75 a week.
Self employed people are not entitled to SSP unless they are paid via PAYE from a Limited Company.
When sick pay runs out
It’s in both your own and your employer’s interests to see what adjustments can be made to help you get you back to work. Your union, if you are in one, can advise you on this.
You can apply for Employment Support Allowance if you are unfit to work and once your sick pay has run out. Apply for ESA if you are under state pension age, are no longer in receipt of Statutory Sick Pay, and are not claiming Universal Credit.
You’ll need to attend a work capability assessment where a healthcare professional to assess your capacity to work. Take your relevant documentation with you from your doctor or hospital. You will be informed of the decision by writing.
There are three possible outcomes:
- You are pronounced fit for work and not eligible for ESA, although you can still apply for Universal Credit.
- Alternatively, you could be placed in the work-related activity group and must attend regular interviews with an advisor.
- Finally, you could be placed in the support group and are not required to attend interviews with an advisor. However, you can attend interviews if you wish. The support group pays a higher weekly amount than the work-related activity group.
You can appeal the decision if you do not agree with it.
There are two types of ESA depending on your past income and national insurance contributions:
- Contribution-based ESA is payable for a year if you are placed in the work-related activity group and have paid enough national insurance contributions. There is currently no time limit for claiming contribution-based ESA if you are in the support group.
- Income-related, for those on a low income irrespective of their national insurance contributions.
ESA is paid fortnightly and is either £91.50 a week if you’re under 25 or £138.20 if you’re over 25.
Other benefits
You may be entitled to other benefits if your income is cut due to sickness or disability. Citizen’s Advice can help you work out what, if any, to apply for. It’s also a free service.
Possible benefits include Housing Benefit such as a council tax reduction if you are responsible for paying the tax and are on a low income. Or Personal Independence Payment (PIP), a benefit to help with the extra costs of physical disability, learning disability and mental health conditions. PIP can be tricky to apply for, which is why charity Turn2Us has launched the PIP helper, a tool to help people apply.
If your partner or any other relative has had to give up their job to look after you, is over 16 and cares for you more than 35 hours a week, then they may be eligible to claim Carer’s Allowance.
If you’re struggling to pay bills such as rent, mortgage or utilities then let the relevant companies know as soon as possible. They may be able to help with a repayment plan or put you on a reduced tariff. Don’t wait until you’re in arrears.
Power of attorney
Finally, disabled or not, it’s in everyone’s interest to consider talking to a lawyer about setting up a legal power of attorney. This will give a named representative power to take control of your finances if you are unable, and they can also make healthcare decisions on your behalf if you are incapacitated. Non-disabled friends and family may also wish to take out income protection insurance themselves, just in case they become sick or disabled in the future.
Useful links
Gov.uk – UK Government website
www.citizensadvice.org.uk – Citizens Advice