Three months ago, life was normal. Like thousands of other people in January, I had just started a new job. What a difference now.
Coronavirus is having a massive impact on all our lives, generating half a million new Universal Credit claims in under a fortnight, forcing many businesses to close, and sending millions of children home from school. The Government has very wisely committed to supporting millions of people with billions in financial aid. But what does it all mean?
The two big-ticket wage support schemes announced – the Coronavirus Job Retention Scheme for employees and the Self-Employed Income Support Scheme – mean that many people without work to do during the current crisis will receive financial support worth a significant proportion of their pre-crisis income. Interest-free loans are also available to businesses, with further grants for the smallest firms.
However, if you became self-employed relatively recently, these schemes cannot support you because the Government can’t assess your ‘normal’ income level. The half a million new Universal Credit claimants also won’t benefit from this support (unless their firms take them back on, to go straight onto the retention scheme). In addition, while there is no excuse for businesses to let go of workers from now on when they can be placed on furlough, it’s inevitable that some firms will go under altogether. It’s also worth noting that workers who cut their hours, to deal with caring commitments, say, are likely to be worse off than those who qualify for the retention scheme because their hours have fallen to zero.
For some, life has become very complicated, where childcare, key worker status, and living with a vulnerable family member, are all happening at once. It’s for reasons like this that employers should take sensible and pragmatic steps to look after the health and financial well-being of their employees. This must include keeping people on the books if they can, for example using the retention scheme, and supporting incomes when people are away from work where possible.
For everyone else, it’s important for individuals and families to claim benefits as soon as possible – and that means Universal Credit (or potentially new-style Jobseeker’s Allowance for those who don’t qualify for UC). With additional elements payable for children and rent, you’re probably eligible for more money than you think on UC – and it tops up income for those in work as well. The recent £20 a week increase will also help millions of families. Yes, there is a five-week time lag between making a claim and receiving the first payment, but anyone who needs it more quickly can ask for an advance payment, which is payable within a week.
It’s unlikely we have seen the last financial support announcement. Also expect more fine-tuning of some policies. We are now working to ensure the Government can put its announcements into practice in short order, while encouraging policy-makers to address the gaps in support that remain.