Government under pressure on benefits for those affected by coronavirus

Pressure is mounting on the Government to increase benefits and statutory sick pay in the face of the coronavirus.

While the government’s announcement last week that it will meet the costs of Statutory Sick Pay for small and medium sized firms was welcomed by many businesses, attention has focused on the level of SSP –  at £94 a week, it is equivalent to just one quarter of weekly earnings for a full-time work on the minimum wage.

Government research published last year shows that just a quarter of firms pay their workers more than this.  Moreover, the Institute of Employment Studies estimates that seven million people – one in five of all workers – are not entitled to SSP, as they earn below £118 a week or are self-employed.

For these workers the advice is to start a claim to Universal Credit, which is just £73 a week. The IES says this is not enough given it is likely that millions of workers will face the impact of coronavirus at the same time over the next few weeks; and because the poverty rates of our statutory system will drive many people – particularly those without symptoms – to continue to work.

It is calling on the government to extend and strengthen the SSP system.  The government will be laying emergency legislation this week, so it is calling on Parliament to legislate to temporarily remove the Lower Earnings Limit in National Insurance so every worker, including zero hours workers and the self employed, will be entitled to full SSP.

It would also like to see the government raise SSP to £175 per week, or the equivalent of half pay for a full time worker on the minimum wage, for the first two weeks; for SSP to be temporarily extended to cover temporary lay-offs and short-time working; to reimburse the costs of these changes for small and medium employers; and to temporarily raise the standard allowance in Universal Credit for those newly out of work to at least £100 a week. 

The IES says: “All of this is entirely achievable within the government’s initial £12 billion covid-19 response fund.  The costs of extending and reimbursing SSP would likely run to a few hundred million pounds, while increasing Universal Credit to £100 for those newly out of work would cost around £50 million per month (even if new claims double).

“These are exceptional times and need an exceptional response.  This week, Parliament has an opportunity to ensure that no-one has to face the choice between going to work and getting better (or staying isolated).  We would urge them to take it.”

Meanwhile the Government announced today that pregnant women are among those deemed vulnerable to the coronavirus and have been asked to implement social distancing by avoiding public places and unneccessary social contact.

And the trade body UKHospitality warned that thousands of businesses in Britain’s hospitality sector could face bankruptcy following the latest government advice that people should avoid visiting pubs, restaurants and bars.

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