Employment support allowance: Who can claim it and how much your small business can get

Published Tuesday 23 December 2025

Table of contents

• What is ESA?
• Types of ESA
• Who can claim ESA?
• How much is ESA?
• How to claim ESA
• ESA and Universal Credit for the self-employed
• How to protect yourself in times of sickness when you're self-employed
• FAQs on Employment and Support Allowance

Key takeaways

• Apply for New Style ESA if you've paid National Insurance contributions in at least two of the last three tax years and have medical evidence showing your health limits your ability to work.

• Gather essential documents before applying, including your National Insurance number, bank details, doctor's information, fit note, and details of any current income or Statutory Sick Pay end date.

• Utilize permitted work rules to continue running your business on a smaller scale while claiming ESA, working up to 16 hours per week and earning no more than £195.50 per week.

• Recognize that ESA payments vary significantly based on your assessment outcome, ranging from £72.90-£90.50 weekly during assessment to up to £140.55 weekly if placed in the support group with no time limits.

What is ESA?

Employment and Support Allowance (ESA) is a UK government benefit that provides financial support when illness or disability affects your ability to work. You can claim ESA whether you're employed, unemployed, or self-employed. The benefit helps replace lost income when health conditions limit your working capacity.

ESA is particularly valuable for self-employed individuals because you don't receive employer sick pay.

Key benefits for the self-employed:

• Financial support: Replaces income lost due to health conditions
• Work flexibility: You can continue working while claiming ESA under permitted work rules
• Permitted work limits: Work up to 16 hours per week and earn up to £195.50 per week under the permitted work higher limit

ESA eligibility criteria for the self-employed

ESA eligibility depends on meeting specific health, work, and contribution requirements. You'll need to fit the following:

1. Your Statutory Sick Pay (SSP) has ended or you aren't eligible for SSP
2. You are under State Pension age
3. You have a disability or a health condition that affects how much you can work
4. you have paid enough National Insurance contributions in the last three years to claim ESA
5. You have a 'fit note' from your doctor (also known as a 'sick note') to support your application

Types of ESA

ESA types are based on your National Insurance contribution history and financial circumstances. There are two main types:

• New Style ESA: Based on your National Insurance contributions over the last three years
• Income-related ESA: An older benefit type that considers your savings and household income (no longer available for new claims)

New Style ESA (or contribution-based ESA)

To get New Style ESA, you must have paid enough National Insurance and show that your health limits how much you can work. You may qualify if you've paid National Insurance in at least two of the last three tax years.

Key requirements:

• Health evidence: Medical proof (such as a fit note) showing you cannot work
• Work capacity: Demonstrate limited ability to work due to illness or disability
• Financial independence: Your savings and partner's income don't affect eligibility; in fact, you can claim New Style ESA even if you or your partner have savings over £16,000.

You cannot claim New Style ESA while you get Statutory Sick Pay (SSP). You can read more about sick pay for the self-employed. You can apply for New Style ESA up to three months before your SSP ends and you'll start receiving it once your SSP ends.

Find out if you're eligible for New Style ESA.

Income-related ESA

Income-related ESA is no longer open to new applications and is being replaced by Universal Credit. The government plans to move around 800,000 existing ESA claimants over to Universal Credit. This older ESA type was means-tested based on your savings and household income. If you currently receive income-related ESA, your payments will continue until your claim ends.

Who can claim ESA?

To get Employment and Support Allowance (ESA), you generally need to meet a few key conditions. The rules can vary slightly depending on your circumstances, but the main requirements are listed below.

ESA eligibility criteria

You'll usually need to fit the following:

• Your Statutory Sick Pay (SSP) has ended, or you aren't eligible for it
• You are under the State Pension age
• You have an illness or disability that affects your ability to work
• You've paid enough National Insurance contributions over the last two to three years (this applies to New Style ESA)
• You have a fit note (also known as a sick note) from your doctor to support your application

How much is ESA?

ESA payment amounts vary based on your age, assessment phase, and work capability group. Payments are made every two weeks directly to your bank account. The amount you receive depends on how severely your condition affects your ability to work.

Assessment phase

Assessment phase payments are the initial ESA amounts you receive while your eligibility is being determined. This phase typically lasts up to 13 weeks. Your weekly payment during assessment depends on your age:

• up to £72.90 a week if you're aged under 25
• up to £90.50 a week if you're aged 25 or over

Extended assessment periods may occur in complex cases:

• Continued payments: You'll keep receiving the assessment rate until a decision is made
• Backdated payments: If approved, you'll receive any additional money owed from the decision date

Main phase

ESA work capability groups determine your payment amount and requirements after the assessment phase.

Work-related activity group:

• Eligibility: Cannot work now but may return to work within a year
• Requirements: Attend regular work coach sessions to prepare for employment
• Time limit: If you get New Style ESA, payments in this group last for up to 365 days
• Activities: Small steps towards employment (CV writing, job searching)

Support group:

• Eligibility: Cannot work and not expected to prepare for work in the future
• Conditions: Severe disability, illness, or a terminal diagnosis (less than 12 months to live) – this rule recently changed from 6 months
• Time limit: No time limit on ESA payments
• Requirements: No work-related activities required

During the main phase of your ESA claim you'll receive:

• up to £90.50 a week in the work-related activity group
• up to £140.55 a week in the support group

How to claim ESA

ESA application documents can help speed up your claim. Gather these items before you start your application:

1. your National Insurance number
2. your bank or building society account number and sort code
3. your doctor's name, address and phone number
4. a fit note (once you've been unable to work for seven days in a row)
5. details of your income (if you're working)
6. the date your Statutory Sick Pay (SSP) ends (if you're entitled to SSP)

ESA and Universal Credit for the self-employed

Claiming ESA and Universal Credit together is possible but affects your total benefit amount.

Key points:

• Dual claims: You can apply for both New Style ESA and Universal Credit
• Payment reduction: Your Universal Credit payment decreases by the amount of ESA you receive
• Total benefit: The combined amount may be higher than Universal Credit alone

How to protect yourself in times of sickness when you're self-employed

If you plan ahead for sickness or other setbacks, you can help keep your business stable. With Xero's accounting software for sole traders and the self-employed, you can stay on top of your business finances and plan ahead more easily.

Cash flow forecasting helps you to foresee any cash flow difficulties, plan for them, and give your business the best chance of maintaining healthy finances, even in times of sickness. Learn more in the Xero cash flow support hub.

FAQs on Employment and Support Allowance

Here are answers to some of the most common questions you may have about claiming ESA.

Is ESA taxable?

No, Employment and Support Allowance is a tax-free benefit.

Can I run my business while claiming ESA?

Yes, you may be able to do some work while claiming ESA. This is called 'permitted work'. Generally, this means you must work less than 16 hours a week and earn no more than £183.50 a week. It's a good way for self-employed people to keep their business running on a smaller scale while getting support.

How much ESA will I receive if I also get PIP?

PIP and ESA are separate benefits that don't affect each other. You can receive both payments simultaneously without any reduction in either amount.

What happens if I am put in the support group for ESA?

Support group placement means you have severe health conditions that prevent current and future work. This group provides the highest level of ESA support with no work-related requirements or time limits on payments.

What are the recent changes to ESA rules?

The main recent change is that most new claims are for 'New Style' ESA. The older income-related ESA is no longer available to new claimants and has been replaced by Universal Credit. If you claim both New Style ESA and Universal Credit, your Universal Credit payment will be reduced by the amount of ESA you receive.