Coronavirus: Average worker 'loses two-thirds of income while self-isolating'

Tom Belger
Finance and policy reporter
Commuters cross London Bridge. (Peter Summers/Getty Images)

The Budget was a “missed opportunity” to hike sick pay levels for workers self-isolating over the coronavirus, according to a leading think tank.

New analysis suggests the average UK worker would lose more than two-thirds of their income if forced to rely on statutory sick pay.

The government itself has warned one in five workers could be absent from work over the pandemic, and up to 80% of the population could be infected in a worst-case scenario.

The legal minimum sick pay employers have to offer is £94.25 a week. Some employers pay more, but a paper by the Resolution Foundation on Thursday argued the minimum rate was “very low” compared to other countries.

The think tank welcomed additional support for workers and employers unveiled in the Budget on Wednesday, but said chancellor Rishi Sunak should have gone further.

Read more: What the UK Budget means for you and your finances

It said prime minister Boris Johnson’s government could have raised sick pay levels as the Irish government recently did. It criticised the Budget for not including new support for low earners, with two million employees currently earning too little to qualify for any sick pay at all.

The think tank noted the government had considered reforms less than a year ago, proposing a rate at 80% of normal pay for those earning under £118 a week. But the proposals appear to have been shelved.

The lack of any extension leaves the low-paid “reliant on less generous universal credit.” The new benefit includes a controversial five-week wait for a first payment, and a means test that rules out support for those with more than £6,000 savings or a working partner.

Several Budget measures received the think tank’s backing, however.

Read more: Retailer Wilko to slash sick pay for thousands of staff

Employees will be eligible for sick pay while self-isolating without needing to be diagnosed with the virus. The government had already confirmed sick pay entitlement will temporarily begin on day one rather than day four of absence.

Anyone eligible for contributory employment and support allowance (ESA) will receive it immediately. Councils will receive £0.5bn to offer support through council tax discounts and other measures to those affected.

Support also includes £5bn of support to help otherwise viable firms through the “temporary shock,” stopping them having to lay off staff or close. Small and medium-sized firms will be able to reclaim the cost of coronavirus-related sick pay from the government.

The emergency package for firms is “welcome and comprehensive,” and well-targeted at smaller companies less able to handle disruption, the foundation said.

Asked about not extending sick pay, Sunak told the BBC on Thursday some gig economy workers would receive support.

“For those that don’t, we’ve strengthened the working of our welfare system so that it works quicker, more responsibly and more generously for those people.”

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