Government announces new employment support package and series of benefit changes for people affected by coronavirus

Economic intervention ‘unprecedented in the history of the British state’, says Chancellor

The government has announced a new employment support package and a series of benefit changes for people affected by coronavirus (COVID-19).

Outlining a ‘Plan for People’s Jobs and Incomes’ this evening, the Chancellor Rishi Sunak said that the new measures are designed to protect people’s jobs, offer more generous support to those who are without employment, strengthen the safety net for those who work for themselves, and help people who stay in their homes –

‘The economic intervention that I’m announcing today is unprecedented in the history of the British state.

… I know that people are worried about losing their jobs. About not being able to pay the rent or the mortgage. About not having enough set by for food and bills. I know that some people in the last few days have already lost their jobs.

To all those at home right now, anxious about the days ahead, I say this: you will not face this alone.’

Announcing that, for the first time in history, the government is going to step in and help to pay people’s wages, the Chancellor set out plans for a new Coronavirus Job Retention Scheme, the key features of which will include -  

• employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but who are ‘furloughed’, and kept on payroll, rather than being laid off;
• all employer across the UK - small or large, charitable or non-profit - will be eligible for the scheme;
• the government grant will cover 80 per cent of the salary of retained workers up to a total of £2,500 a month, with employers being able to top up salaries further if they choose to; and
• support with the cost of wages will be backdated to 1 March 2020 and will initially be available for at least three months, with the option for the scheme to be extended if necessary.

The Chancellor added that HMRC are ‘working night and day’ to get the scheme up and running, with the first grants to be paid ‘within weeks’.

In addition, acknowledging that the government ‘cannot promise you that no one will face hardship in the weeks ahead’, the Chancellor set out a series of changes to benefits and tax credits designed to ‘strengthen the safety net’, including –

• increasing the universal credit standard allowance and the working tax credit basic element by £20 a week for the next 12 months;
• suspending the minimum income floor for everyone affected by the economic impacts of coronavirus; and
• increasing the ‘generosity’ of housing benefit and universal credit, so that the local housing allowance will cover at least 30 per cent of market rents in an area.

For more information, see Chancellor announces workers’ support package from gov.uk