Furlough scheme should be used to encourage more workers at risk of Covid infection self-isolate

The Government should use the Job Retention Scheme (JRS) to encourage more workers to self-isolate at home – a key part of the Government’s strategy to fight Covid-19 that the current sick pay regime is failing to support – new Resolution Foundation research published today (Wednesday) will urge.

The report – Time Out – explores the eligibility, generosity and efficacy of the UK’s statutory sick pay regime and Test and Trace payments during the Covid-19 crisis, and considers the case for reform.

It concludes that with self-isolating continuing to play a crucial role in fighting Covid-19 throughout 2021 as the vaccine is rolled-out, and with the Head of Test and Trace Dido Harding admitting that financial difficulty means some people are refusing to self-isolate, the current system needs to be replaced with a more effective regime.

The report notes that the main support available for employees asked to self-isolate at home is Statutory Sick Pay (SSP). But at just £96 a week, SSP offers the lowest level of Government support provided across any advanced economy during the pandemic. SSP replaces less than a quarter of a typical employee’s previous earnings, compared to an OECD average replacement rate of 60 per cent.

Furthermore, two million employees earning less than £120 a week are not eligible for SSP – a barrier that excludes one-in-four part-time workers, and one-in-seven workers in retail, hospitality and leisure – leaving them with no income at all if they self-isolate at home.

The Government has implicitly acknowledged the limitations of SSP by introducing £500 Test and Trace Support Payments (TTSP) for individuals entitled to benefits.

However, the report finds that these more generous payments are not reaching enough people, with only one-in-eight workers entitled to them. For example, data supplied by local authorities across West Yorkshire – an area which has had one of the highest infection rates in the UK over recent months – showed that just 1,783 payments have been made between 12 October and 25 November.

With financial support for self-isolating at home playing a critical role in helping to bring Covid infections down, the report calls for a more effective, generous and easy to deliver support regime to be put in place – using the JRS, Self-Employment Income Support Scheme (SEISS) and Employment and Support Allowance (ESA).

The Foundation proposes the following support:

  • Employees to be paid via the JRS. Extending the JRS to include self-isolation payments would ensure workers retained 80 per cent of their previous earnings. The Foundation estimates this would cost £426 million a month (up from around £112 million which is spent on SSP) if 643,000 employees used the scheme.
  • Self-employed workers to be paid pro-rata via the SEISS. Grants of up £830 should be awarded to self-employed workers who need to self-isolate for ten days, if they haven’t already claimed.
  • Self-employed workers not entitled to SEISS to be paid via enhanced ESA. The many self-employed workers not eligible for the SEISS are entitled to ESA. This payment should be uprated by £20 to £96 a week – in line with the uprating of Universal Credit – while people are asked to self-isolate.

The Foundation adds that while the following package of measures would help to get Covid infections down, the failure of the UK’s sick pay regime should not be forgotten once the pandemic has passed. Permanent reforms to both its eligibility, generosity and operation will be needed, it says.

Maja Gustafsson, Researcher at the Resolution Foundation, said:

“Getting people to self-isolate at home is one of the important tools we have in combatting Covid-19. But asking workers to do that often involves a major financial sacrifice – and the UK’s sick pay regime has been woefully inadequate in providing the necessary support. Many more Covid infections will have taken place as a result.

“Coronavirus vaccines will take many months to roll out, so more workers will need to self-isolate at home to contain the spread of the virus next year. Given the failure of the current sick pay regime, the Government must turn now to the far more successful job support schemes to provide workers and firms with the financial support they need to do the right thing.

Notes to Editors

  • Giving evidence to MPs at a recent session of the joint inquiry into the pandemic, Head of Test and Trace Dido Harding admitted that financial difficulty means some people refuse to self-isolate if they themselves aren’t ill, saying: “All the evidence shows that people are not complying with isolation not because they don’t want to but because they find it very difficult. The need to keep earning and to be able to feed your family is a fundamental element of it.”
  • The Foundation’s example cost estimate of a weekly average of 150,000 employees who can’t work because of illness or asked to self-isolate at home, is based on average weekly infection rate data from 8 October – 12 November