Following the Governments new Welfare Reform Act which came into force on 27th October, income protection can no longer be an after thought for Contractors but is now a necessity.
In a bid to reduce the number of welfare claimants and encourage people back to work quicker, the Government have launched new rules aimed at changing the way in which people recieve benefits and making it harder for them to claim in the first place. Having set ambitious targets of getting one million people off of incapacity benefits by 2015, the new plan has been radical in its approach.
Out with the old – in with the new
Instead of the old incapacity and income support benefits, a new Employment and Support Allowance (ESA) has been introduced. Before a claimant can qualify for the ESA they must undergo a mental and physical assessment to determine their ability to return to work. Crucially, it does not assess your ability to do your own job, but instead your physical and mental ability to do any job – Contractors beware!
This means that if you are still able to stack shelves at a supermarket then you will be put to work in that role, regardless of your previous qualifications and pay grade. Once an assessment has been made, you will be given careers advice and support to get you back to work in some sort of employment as quickly as possible. The ESA is paid depending on your circumstances:
|Pay (per week)||Circumstances|
|£60.50 (if aged over 25)||During 13 week assessment period|
|£84.50||Candidates assessed as able to work and attending interviews (from week 14)|
|£89.50||Candidates found to be unable to do any form of work (from week 14)|
As you can see, this paltry income is unlikely to enable you to lead the lifestyle that you enjoy as a Contractor. These changes make Income Protection an even greater necessity for Contractors, especially as you do not benefit from the sick pay that working for a large employer would give you. You rely on being able to get on site in order to earn a living and if illness or injury should prevent you from doing so then £84.50 is potentially all you would have to live on.
Contractor Income Protection
You can protect yourself from the potential repercussions of an illness or injury with Contractor Income Protection. We have searched the whole of the market to find the providers with proven track records in paying out on Contractors claims and our experience in the industry means that we have built strong working relationships with providers that understand the unique needs of Contractors.
With many options available including whole of life policies, term assured cover and deferred payment options, it can be easy to get confused as to which insurer provides the best cover for your circumstances. However, our award winning income protection team are on hand to guide you through the process from start to finish. The application is quick and easy to complete and can be done over the phone with our protection specialist Samantha Foster.
If you find yourself in the situation where you need to make a claim then Contractor Financials can help you to get your payment quickly and with the minimum of stress so that you can concentrate on getting back on your feet.