A new national lockdown was introduced at the new year, to stem the tide of spiralling cases of Covid-19. As previously the case, the lockdown will see sectors of the economy grind to a halt, such as hospitality and tourism. This will cause many people to suffer renewed financial pressure.

Worryingly, factors that contributed to heightened worker insecurity, which surfaced through the early lockdowns, have not been addressed. Government’s support packages for workers and elements of the social security system, still leave many people facing high levels of insecurity.

Sick pay while self-isolating

At £96 per week, Statutory Sick Pay (SSP) covers just 20% of workers’ income, the lowest across OECD countries.

Recent data shows that over 400,000 workers are ineligible for SSP. Workers who earn less than £118 a week don’t aren’t entitled to SSP, which means women, those in insecure work, and both younger and older workers are less likely to get sick pay as a result.

With many workers falling through gaps in support and those who are eligible finding SSP isn’t sufficient to meet essential living costs, workers on low incomes in public facing roles with Covid-19 symptoms will have real difficulty following guidance to self-isolate. Independent Sage Advisors warn that this could increase transmission of the virus, with workers lacking an effective buffer should they need to self-isolate.

Support for the self-employed

The Self Employment Income Support Scheme (SEISS) provides self-employed workers affected by the crisis with a grant worth 80% of their average profits to the, for a three-month period, up to £7,500. It has been an important source of support for the self-employed, but large numbers don’t qualify for the scheme.

Access to SEISS depends on when a worker became self-employed, on how much they earn, and how much of their overall income is earned through self-employment.

In April last year, the Institute for Fiscal Studies estimated that as a result of these three barriers, 38% of self-employed workers will not be fully covered under the SEISS scheme, and 18% will not be eligible at all

A further group of self-employed workers who miss out are company directors who rely on dividend payments for their main take-home.

Welfare support through Universal Credit

While Universal Credit and other welfare benefits can be used to top up furloughed workers’ income, many face significant barriers to accessing this support.

A study conducted by researchers from the Universities of Kent and Salford estimated that 290,000 people had unsuccessfully attempted to claim Universal Credit, Job Seekers Allowance or Employment and Support Allowance during the pandemic.

Individuals or couples with savings of £16,000 are not eligible and for those who hold savings between £6,000 - £16,000, payments will be tapered down. Individuals who have no recourse to public funds are also unable to access means tested benefits including Universal Credit.

Mothers working at home

With the Government announcement that schools would close during the lockdown, many parents again face challenge of working from home whilst also home schooling. Mothers are cutting their hours to care and support their children at a more rapid rate than fathers. Research by the Resolution Foundation shows that during the first lockdown, women were almost twice as likely as men to reduce their hours of work to care for children (16% to 9%).

While the rollout of the Covid-19 vaccination provides light at the end of the tunnel, many employers and businesses are bracing themselves for things to get worse before they improve.

Until the current lockdown is eased, it is important that Government takes heed of prior experience and sets out to ensure that groups at risk of falling through gaps in support, are reached. This will be crucial to protecting against poor mental health outcomes. Our report published last year on mental and financial wellbeing during Covid-19 found that poor financial wellbeing is leading to increased distress among people who have been laid off during the crisis.

And in our report on the retail sector published last year, No Returns, we called for Government to enhance Statutory Sick Pay provisions, through both increasing rates and reviewing eligibility. This will be one part of a broader effort needed to ensure that workers do not fall through the cracks - such as retaining the £20 weekly uplift to Universal Credit payments, and ensuring that financial support is available to all workers affected by the pandemic.

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