Guest Blog by Katharine Moxham, spokesperson for Group Risk Development (GRiD)
Whilst the self-employed community can breathe a sigh of relief that the recently proposed increase to their National Insurance contributions has been withdrawn, there are other changes in the offing which perhaps don’t reinforce the message that “we’re all in this together.”
Employers may need to be ready to pick up the baton on behalf of their staff rather than hoping for more U-turns.
Here are a few to be mindful of:
New Bereavement Support Payment came into effect on 6 April 2017 to replace the current suite of State bereavement benefits (Bereavement Payment, Bereavement Allowance and Widowed Parent’s Allowance). On the face of it, the changes appear to be beneficial, with a refocus on the additional and more immediate costs of bereavement, giving support for the 18-month period immediately following the bereavement (rather than for 12 months), and no loss of benefit on remarriage or re-partnering. However, many families will be worse off, especially those with children where the current Widowed Parent’s Allowance is paid until such time as Child Benefit stops.
Probate fees are set to increase significantly in May 2017 (from a flat zero, £155 or £215 to a banded system with a maximum fee of £20,000).
The combination of both changes above will result in many families being worse off (despite the fact that the changes to probate fees have been challenged as unlawful and we may yet see a U-turn on that). One terminally ill father has spoken out recently on the changes to bereavement benefits, highlighting that his family will be worse off by £50,000.
Contributory Employment & Support Allowance (ESA) reduced from 6 April 2017 for new applicants who are assessed as unfit for work, but capable of work-related activity, who will now receive a lower level of benefit equivalent to Job Seeker’s Allowance. Compared to the previous allowance, this means that new ESA claimants who are placed in the work-related activity group will receive £3,801 instead of £5,312 a year.
So, state support for those who are off sick for any length of time is reducing.
The Department of Work & Pensions/Department of Health Joint Policy Unit’s Improving Lives: The Work, Health and Disability Green Paper also highlights the role that employers will be expected to play in reducing the employment disability gap, and supporting ill or disabled employees back into the workplace.
Everyone needs a way to protect their household’s financial position from the impact of death, illness, disability or accident, and these changes make that need even more acute. Employers are ideally placed to help their people to do this and there is very affordable support that employers can offer to plug the gap, as the State steps back.
Group risk benefits could be even more important as the state steps back
Group risk benefits (employer-sponsored life assurance, income protection and critical illness benefits) through the workplace have always given vital financial support to people when they need it most.
However, it’s not only financial support these benefits give to workers and their families.
It’s not quite as well known that these products include other help and support that can be used by business owners, line managers and staff every day, even if a financial claim is never made. This daily support can include an Employee Assistance Programme, HR and legal advice, stress management, fast-track access to counselling, second medical opinion and much more.
Increasingly, group risk protection providers are also focusing on health and wellbeing so you may also find help with this included too – for example access to GP services, health tracking apps and mental health support.
35% of households have no savings to help them through illness
Latest findings from The Money Charity highlight that around 9.45m (35%) households have no savings, while a further 2.97m (11%) have under £1,500. Added to this, the average total debt per household in the UK was £56,460 in February 2017, so it’s clear to see that for many UK households, if there are no earnings throughout a period of illness or disability or after the death of a breadwinner, this could spell financial disaster for them.
It’s so easy for employers to make a difference here, but GRiD’s research regularly indicates that the cost of these benefits is overestimated or businesses don’t appreciate how much is included, which could save them money elsewhere (e.g. by not having to invest separately in a stand-alone EAP or HR/legal advice).
It is well worth exploring options with your adviser or provider to come up with a package that suits your business and budget. After all, what else costs a few pounds a month per employee but can pay out thousands (or even millions) and also gives real value on a daily basis?
 The Money Charity: “The Money Statistics” April 2017