Forum Home → Discussion → Covid-19 issues → Thread
New employment support package just announced
New employment support package being announced by the Chancellor just now:
- new coronavirus job retention scheme
- all employers will be eligible
- will be an HMRC grant
- will cover up to 80% of wages, up to £2,500 a month
- covers whole of the UK
- backdated to 1 March 2020
- open initially for 3 months
Plus, benefit changes:
- universal credit standard allowance to be increased by £1,000 for next 12 months
- working tax credit basic element to be increased by £1,000 for next 12 months
- minimum income floor suspended for everyone affected
- increase in the local housing allowance ... to 30% of market rents
The Chancellor’s speech has now hit gov.uk:
On the face of it increases to Tax Credits and UC only is going to create anomalies with those on old style IS, JSA or ESA and possible create a short term incentive for people to want to move over - which is something the DWP clearly would not want at the moment.
Looking further ahead it will be interesting to see how the prospect of reversing the increase will look in 12 months time. With luck they might become permanent (?).
[ Edited: 20 Mar 2020 at 07:35 pm by Ianb ]Great news for many people.
I have clients in receipt of Working Tax Credit. Has HMRC indicated whether they will regard people as working their usual hours while furloughed?
If working tax credit stops, does this mean that the benefit cap will kick in? (while many clients will be protected initially by the grace period not all will have built up enough of a work history)
On the face of it increases to Tax Credits and UC only is going to create anomalies with those on old style IS, JSA or ESA and possible create a short term incentive for people to want to move over - which is something the DWP clearly would not want at the moment.
Looking further ahead it will be interesting to see how the prospect of reversing the increase will look in 12 months time. With luck they might become permanent (?).
Those getting Tax Credits and HB/CTS will lose most of the increase as well.
Is it worth NAWRA or similar making a call for means-tested legacy benefits to be increased by the same amount, and for the personal allowance in the HB/CTS applicable amount to be increased too? Or is that hilariously naive?
L
The packages are hoped to be temporary (although reality is that they are likely to be longer than 2 or 3 months currently talked about) and are aimed at people in work with a view to keeping them employed or helping them with the sudden loss of work. The government will hope that those entering the benefit system will leave it after a limited period
People on legacy benefits have, by definition and with limited exceptions, been on the benefit system for some time and in many, if not most, cases will have modest income from work so are not being hit by the crisis. Seems to me it is not the purpose of the emergency measures to provide additional money to existing claimants. Existing UC claimants are obviously going to benefit from any increases but I think this is an unintended consequence rather than a policy objective.
That’s my take on it anyway.
I hadn’t thought of the point Charles makes about the WTC increase possibly being eroded by claw back through other benefits.
More info: Government publishes further details of its Coronavirus Job Retention Scheme
HMRC has tonight issued more detailed guidance on the Retention Scheme ...
https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
HMRC has tonight issued more detailed guidance on the Retention Scheme ...
https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
HMRC has just issued updated versions of its guidance ..
For employers: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
For employees: https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme