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Managing your finances during difficult times

In times like these, thinking about your financial situation can be stressful. Fears over the spread of coronavirus are causing lots of people uncertainty and real worry in different areas of their lives, from their health and wellbeing to work and finances. But there are things you can do that may help and if you have any questions about financial planning, get in touch with us.

Review your budget
A useful first step can be to look at how much you’ve got coming in and going out. As well as making sure you’re claiming what you’re entitled to – including benefits, sick pay and tax relief – you may need to see if
you can cut back on your outgoings. Depending on your spending and needs, that might not be easy as it could mean seeing if you can do without things you’d normally buy. Some banks offer spending breakdowns by category on their apps or websites. Using this resource can be a easy way to track your expenses when creating or reviewing your budget.

Look over your household bills
It can be a good idea to review all your utility bills and see if you could get a better deal if you switched energy or broadband suppliers. As many people are isolated at home during this time, the Commission for the Regulation of Utilities (CRU) has put in place the following measures:

  • To support customers with gas prepayment meters who can’t top up remotely, emergency credit levels for all gas prepayment customers have been increased from €10 to €100.
  • The CRU has also issued a moratorium on disconnections of domestic customers for non‑payment of utilities. This means that no disconnections will take place up until 16 June 2020, after which the CRU will further assess the situation.

If you’re experiencing difficulties paying your utility bills, you should contact your provider directly. If you’re renting, you are still expected to make your rent payments. However, income supports and rent supplement are available if you’re struggling to pay. Rent increases and tenancy terminations have also been paused for the duration of the Covid‑19 crisis.

Access any debts or loans
Debts that may have been affordable a few weeks ago could now be causing you to worry if your income has dropped or if it might do so in the near future. If you’re having trouble with loan repayments, you should
contact your provider directly to talk through what options are available to you. Financial services companies are offering a range of measures to help customers affected by the Covid‑19 crisis. AIB, Bank ofIreland, KBC, Permanent TSB and Ulster Bank are offering:

  • A payment break on loans (business loans, personal loans and
    credit) of up to three months for customers.
  • A simplified application process to apply for support.
  • A solution to ensure that an application for a payment break as a result of Covid‑19 will not affect your credit record.
  • Deferral of court proceedings for three months.

The payment break means you have the option of not making your loan repayments for up to three months and your credit record won’t be adversely affected. At th end of the payment break period, your
repayments will be adjusted so your loan will be repaid within its original term, so your new repayments will be higher than they were before the payment break. Credit unions make decisions at a local level, so if you have concerns about meeting your loan repayments to a credit union, you should contact them directly.

See if you can claim any benefits

Benefits for employees
If you have lost your job due to the crisis, you can apply for the Covid‑19 Pandemic Unemployment Payment, which is currently €350 per week. You can apply for this if you are an employee or are self‑employed. If you have been temporarily placed on a shorter working week, you may qualify for Short Time Work Support which is an income support payment if you have been temporarily placed on a shorter working week. The payment is made in respect of your regular salary for the days that you are no longer working. For example, if you usually work five days a week but this has been reduced to three days a week, you can receive support for the other two days.

Benefits for employers
If you’re a business owner, the Temporary Covid‑19 Wage Subsidy can help you to continue to pay staff who would otherwise be laid off because of trading difficulties caused by the pandemic. This allows your employees to retain their link with your business and there is no need for them to personally submit a jobseeker’s claim. From 04 May 2020, payments will be based on the previous net weekly wage for each employee.

To make a claim or find out more, visit the Department of Employment Affairs and Social Protection website, www.welfare.ie

Check if you’re entitled to sick pay
In Ireland, there’s no legal obligation for your employer to pay you while you’re on sick leave, so sick pay entitlement depends on your contract and/or your employer’s sick pay policy. If you’re not entitled to sick pay from your employer, you may still be entitled to benefits such as:

  • Illness Benefit: a weekly payment to support you if you can’t work in the short term because you’re sick or ill, currently up to a maximum of €203 per week. You’re not entitled to this if you’re self‑employed.
  • Illness Benefit for Covid‑19 absences: an enhanced Illness Benefit payment of €350 per week if you have been told to self‑isolate by a doctor or the HSE as you are a possible source  of infection, or if you have been diagnosed with Covid‑19.   If you receive this benefit and have dependants, an increased rate for Qualified Adults of €147 per week is available to help you support them.

To make a claim or find out more, visit the Department  of Employment Affairs and Social Protection website,  www.welfare.ie

Look into tax relief possibilities
If you’re working from home during the Covid‑19 crisis, you may be able to claim tax relief from Revenue to help cover expenses you incur while working from home, such as heating, broadband and electricity costs. Typically, utilities are used for both personal and work use, so the refund will be based on the portion of your overall expenses which relate to your time working from home.

How to claim tax relief At the end of the year, you can complete the Income Tax return through ‘My Account’ on the Revenue website. Revenue recommend that “all documentation relating to a claim should be retained for a period of six years from the end of the tax year to which the claim relates, as a claim may be selected for future examination.’’

For more information and updates, visit the Revenue website, www.revenue.ie

Spend less, save more
It’s worth reviewing regular subscriptions, like gym memberships, that you may be able to freeze or cancel if you’re not going to use them for a while. The Money Advice and Budgeting Service recommends going through your bank statements to try to identify any unnecessary spending that could be mounting up on a monthly basis, like subscriptions for websites and apps you may have forgotten about. Just remember to check any terms and conditions beforehand to see what your options are and when (or if) you can make changes.

For more information, visit the Money Advice and Budgeting Service website, www.mabs.ie

Signing up to supermarket loyalty programmes, where you build up points based on the money you spend and which can offer you discounts and vouchers, may help you to save money on your grocery shopping. You may not be able to save much if your income has dropped, but if you’re able to, it may be useful to try and build up a cash buffer for emergencies. If you’re working from home rather than commuting to work, you’ll be spending less on travel and possibly things like lunches and coffees – you could consider putting this money into a savings account so that it can add up over time. The average household spends €632 during a pandemic week (including housing costs) compared to €837 in a normal week, according to estimates from the ESRI. Proactively saving the difference in your household expenditure during these restrictions could help in the longer term.

See if you can get refunds for cancellations
While most suppliers are trying their best to get deliveries to customers, they should offer you a refund if they need to cancel your order. See if you can get a refund for Commuter Tickets, Concerts & Festival and International Travel (Flights & Package holidays). It may be worth your while to get with the suppliers as might be money back in your pocket.

Watch out for scams
Fraudsters often take advantage of uncertain situations like the coronavirus outbreak to scam people out of their money. The Central Bank of Ireland and the Competition and Consumer Protection Commission had the following advice to bear in mind in order to protect yourself from scams:

  • Scammers are sophisticated, opportunistic and will use many forms of media, for example, phone calls, SMS, emails, websites, social media and more.
  • Never provide personal information about yourself, never provide your bank details and never agree to send money until you are satisfied that the company you are dealing with is authorised and genuine. Before giving any personal information stop and think. Contact your service provider using the phone number on the official website. If in doubt, don’t reply to SMS or emails.
  • You should also be wary of unsolicited emails or messages claiming to come from your service provider asking you to update your payment information or to click a link to update your financial information. For example, you may get an email or text that claims to be from your bank, asking you to update your information or telling you there has been some unusual activity on your account. You may be asked for personal information relating to your account. This is a scam, your bank will never ask you for your details in this way.
  • Always act carefully when engaging with websites, companies or individuals you’re unfamiliar with. Research any website or company before buying anything and don’t just rely on reviews from one website or forum, as they could be fake.
  • Be aware of firms offering any financial services or products that appear too good to be true, like cash loans, money transfers, insurance products, pension products, investment opportunities and more.

Review your protection policies
Life insurance providers have introduced measures to help customers in these uncertain times. These financial supports vary slight depending on your provider. 

To give you an example of one provider Royal London see their initiatives below:

100‑day Reinstatement Period
Royal London offers a reinstatement period of up to 100 days on all policies except Multi‑Claim Protection Cover. This means that, in a time of crisis, customers can reinstate their policy within 100 days of missing a premium, without having to provide new medical evidence. This has been available on all new policies sold since September 2019 and in the majority of cases can also now be extended to older policies that require additional time to reinstate due to current circumstances. When the policy is reinstated, the outstanding premiums must be paid, and the policy will continue. If you have missed a premium and wish to discuss reinstatement options, get in touch.

Premium Deferral Option
Extra flexibility is called for in unprecedented times such as these. If you’re struggling to pay the premiums on your Royal London policy, you have the option of a 3‑month premium deferral. During this 3‑month period, no premiums will be payable, but your cover will continue. At the end of the premium deferral period, the premium arrears due can be repaid at that point or spread out over the upcoming 12‑month period. You can choose the option that best suits you. If you want to avail of a premium deferral, please get in touch.

Income Protection and Essential Activities Benefit
Royal London’s Income Protection pays out in the event that you’re unable to work through illness or injury for a continuous period longer than your deferred period. It does not provide cover for redundancy but does include an Essential Activities Benefit. This is an annual benefit payable if you suffer from personal incapacity, in line with the policy conditions, while unemployed. The benefit amount is the lower of €15,000 a year and your Income Protection benefit amount. Your premiums will be reduced during this time to reflect any reduction to your full cover, as long as you let us know about your change in circumstance. If you return to work within 12 months of switching to our Essential Activities Benefit, you can reinstate your full cover without having to provide any new medical evidence.

Future savings to be made on life cover
Talking to a Financial Broker about which life cover policy best suits your needs can be a great way to make sure you’re not overspending on insurance, as they have access to a variety of policies and providers. It’s important to make sure that adequate financial protection is in place to cover you and your family, especially if your financial or personal circumstances have changed. If you were a smoker when you took out your policy, and it’s been more than a year since you last smoked or used nicotine replacement products, you may be able to avail of a reduction in your premiums.

With many people in Ireland reassessing their finances and looking for ways to cut costs, having some tips on hand and knowing what you’re entitled to can make a big difference. It’s important in times like these to look after your physical and mental wellbeing, so being proactive about your finances if they’re causing you any stress is an important part of keeping yourself safe and well.

Ask us if you have any queries regarding personal finance. Remember no query is too small, or too big.

Stay Safe,
From everyone here in Hennelly Finance

Phone: 091586500
E-mail: [email protected]

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