Here to help – in sickness and in health...

TRICIA PHILLIPS HAS EVERYTHING YOU NEED TO KNOW IF YOU’RE TOO ILL TO WORK

YOUR MONEY

COVID has left a lasting legacy, pushing the number of people who are too sick to work up to a record high.

The Government doesn’t consider everyone without a job to be unemployed. If you’re not working because you’re not well enough, you care for someone else, or because you’ve retired before state pension age, it says you’re “inactive”.

At the moment, almost 22% of people – more than one in five – are inactive. Before the pandemic, the level of inactivity had been falling for decades, but it has risen 1.5% over the past two years.

Three-fifths of the increase in inactivity has been among those aged 50-64, and the most common reason they leave the workforce is sickness or disability.

In fact, the number of people who aren’t working because of longterm sickness hit a record high of 2.464 million in the three months to July, according to figures from the Office for National Statistics.

Some of this is down to the spread of long Covid, which is now affecting an estimated two million people – with one in five saying it affects their daily activities.

There are also plenty of people with impaired immunity who’ve decided it’s not worth the risk of staying in work because Covid is still circulating.

Then there are those whose conditions deteriorated during the health crisis – either because they haven’t received timely care or because lifestyle changes they were forced to make during lockdowns exacerbated existing illnesses.

But, long-term sickness doesn’t just affect heath, wellbeing and quality of life, it can hit our finances hard too.

How finances are affected

The impact of ill health on our finances can be devastating.

Only around half of people suffering from long-term sickness are employed, and those who are working are more likely to work parttime, which means they are on lower incomes.

The latest savings and resilience barometer from investment firm Hargreaves Lansdown revealed that poor health leaves us less financially resilient across the board.

Only one in four people in ill health have enough cash at the end of the month to be financially resilient – that’s around half of the overall level.

One in three have enough emergency savings put aside to help them through times of ill health – again, this is around half of the overall level. And just one in five say they are on track with pension savings, to see them through a comfortable older age. But things are about to get even tougher for those suffering with long- term illnesses.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, says: “By next year, the costof-living crisis will have taken a major toll on this group and even more will be struggling financially.

“Only around one in five will have enough emergency savings, and just a tiny 3% will have enough cash at the end of the month to be resilient.”

Your rights at work

If you’ve had lots of time off work for a long-term illness, and have been working for your employer for two years or more, they may want to let you go, but you have certain rights.

They need to follow the right procedure – including warning you they might sack you, and giving you a chance to respond. They should also invite you to a disciplinary meeting, and if you’re too ill to go they should consider postponing it or moving it to a different location.

They should also look into your condition – and any planned treatment – and work out when you’ll be able to go back to work, and what you’ll be able to do, as well as consider making reasonable changes to your job or workplace to make it easier for you to go back. This can include working flexibly or parttime, doing different or less stressful work (with training if necessary).

In many cases the occupational health team will assess your condition and prognosis, which will feed into all of this. They may still end up dismissing you, especially if you can’t go back to work, but they have to try all these things first.

If they dismiss you without doing so, you may have a case for unfair dismissal. Any case will also depend on the context, like how long you’ve worked there and how your absence affects the business.

In addition, check whether your illness counts as a disability according to the law. If they sack you because of a disability you may be able to argue you have been discriminated against.

How can you protect yourself?

First of all, to ask what your employer offers. Check conditions of your paid sick leave – including how long it is paid for, and whether it’s full pay or if it tapers away.

Ask about income protection in place through the workplace too. If your employer has this, it may cover you for a fixed period, or it may run until retirement, so check how long the payments would continue for.

If you’re worried that you don’t have enough protection from your employer, you can consider buying an individual policy. This isn’t cheap, but it can be worth its weight in gold if you need it.

■ Income Protection Insurance pays a regular income if you can’t work because of sickness or disability and continues until you return to paid work or you retire. It does not replace the full amount you were earning before you had to stop work, typically about half to twothirds of your earnings before tax.

■ Critical Illness Insurance can be a cheaper option. It provides a lump sum if you are diagnosed with certain illnesses or disabilities. Long-term and serious conditions include a heart attack or stroke, loss of arms or legs, or diseases like cancer or Parkinson’s disease.

You should consider your pension too, because if you had to stop work early, not only would it mean potentially drawing an income from it for longer, but you’ll also have less time to make contributions.

If you do the sums and realise that long-term sickness would leave you in a financial hole, there are a number of things you can do. Try boosting contributions while you’re well, making money in your pension work harder through investments, or see whether there are any other steps you could take if you were unwell, such as downsizing your home.

Long-term sickness doesn’t just affect heath, wellbeing and quality of life, it can hit our finances hard too

State support

If you’re unable to work because of long-term sickness, the benefits you’re entitled to will depend on your condition. If you can’t work – or can only do a few hours a day – and have been paying National Insurance in recent years, you may be entitled to Employment and Support Allowance.

You can also claim for Universal Credit if you qualify – either instead of this or alongside it.

If you have difficulty working because of your condition, but the Department for Work and Pensions thinks you can improve, and eventually be ready for work, they’ll assess you as having “limited capacity for work”, which means you won’t have to look for a job, but you might need to do things like training or writing a CV in order to receive Universal Credit.

If the DWP decided you’re not well enough for these kinds of activities, it may say you have “limited capacity for work-related activity”, which means you don’t need to complete these activities in order to get Universal Credit, and you’ll receive extra money each month too.

If you find it difficult to do everyday tasks, or get around, you may be able to get Personal Independence Payments. If you’ve reached state pension age you may get Attendance Allowance. If you get either, the person who looks after you can get Carer’s Allowance.

Visit moneyhelper.org.uk to find out what you may be able to claim and how.

The number of people too sick to work has been pushed to a record high thanks in part to the Covid pandemic

Employers must follow the correct procedure if they want to let you go