The House of Commons Treasury Committee has released a report regarding the economic impact of Coronavirus, looking at the gaps in Government support and who falls through them.
“Over a million people have lost livelihoods while being locked down and locked out of support.”
Two major schemes were created in response to Coronavirus:
- The Coronavirus Job Retention Scheme: designed to give employed worked 80% of the salaries (cap of £2500). Has supported 8.9 millions jobs across more than 1 million employers.
- The Self-Employment Income Support Scheme: designed to pay self-employed people 80% of their average monthly trading profits over the last three years. Has received 2.6 million claims.
Whilst these two scheme have supported a lot of people, months on there are still people receiving no support or incredibly limited support. The report identifies the following groups as those currently not being supported:
- People newly in employment, or newly self-employed. Data suggests that there are typically more than half a million people starting a new job every month, and there are likely to be hundreds of thousands of people who have set themselves up in business since April 2019 who do not meet the eligibility criteria for either scheme.
- Self-employed people with annual trading profits in excess of £50,000. It has been estimated that around 225,000 individuals may be included in this group and we are concerned about those whose profits fall just over the cap set by the Government.
- Directors of limited companies who take a large part of their income in dividends, and who do not qualify for SEISS, are only entitled to claim support under CJRS on the typically small PAYE component of their income. There may be around 710,000 individuals impacted.
- Freelancers or those on short-term contracts who are unlikely to be eligible for either scheme. We received a large number of written submissions from people in this group.
The report then goes on to recommend how these gaps in support can be addressed by the Government moving forwards, stressing the necessity of Government action to support people who currently fall outside of support.
Read the full report here: Treasury Committee Report on Coronavirus Support.