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Expanding furlough paper, summary

The paper will set out four solutions to help people who have been either refused access to the government’s income support schemes or were excluded from them. It is estimated that these proposals would provide support for an additional one million people. They are:

1.     Create a new access point for those refused furlough by their employers but who otherwise met all of the criteria to join the Coronavirus Job Retention Scheme (CJRS). The suggestion is to open up the CJRS to workers using a new access point within the system so both workers and employees alike are able to access the CJRS. This increase in worker involvement would be much like the French temporary unemployment scheme, where workers have the ability to negotiate their own individual agreements. It would also have the same effect as the incentives given to employers within the (German) Kurzabeit system, which encourages employee uptake by employers.

2.     The government to increase the £50,000 cap that is currently placed on trading profits under the Self-Employment Income Support Scheme (SEISS). This limit being reached means that those who apply for the SEISS are no longer able to access the scheme, even if their trading profits may be much lower this year due to the pandemic and the coronavirus restrictions that have been put in place. To ensure that people in this position are included, the SEISS would need to be altered so that it allows anyone earning £100,000 to claim access to the scheme. If someone’s trading profits are above £100,000 then, in these circumstances, the overall SEISS payments should instead be reduced by 25% for every £25,000 they earn over this limit. This would mean that the new limit for trading profits would instead stand at £200,000 rather than the existing £50,000, with it also removing the cliff edge cap of £50,000. 

3.     Change the current rule which means that 50% of a self-employed persons income must be from self-employment. This has resulted in those who started a business just before the pandemic being left with little, if any, government support as they may not be eligible for support from the CJRS. To fix this, the rule should be altered so that a person only has to earn 20% of their income from self-employment in order to claim from the SEISS.

4.     Increase payments made to those who went on maternity leave before the pandemic, between 2016 and 2019. This is because under the SEISS those people are currently receiving less money than they would have received if they had not taken it. To mitigate this consequence of the SEISS funding algorithm, the government should ensure that future rounds of furlough do not include the time taken that is taken off for maternity leave. To make this change, the government should be given the individual’s National Insurance number so that they are able to check whether that person has previously claimed their Maternity Allowance scheme and if so, for how long they did so. On top of this, when implementing the scheme, it is also important that the right to claim back money that has previously been lost in past rounds of SEISS grants, due to being on maternity leave within the above set timeframe, is included.

The maximum number of people that could be included by the above solutions is just over a million people, although it is important to note that they do not include every single person from each group. This is simply due to the huge range of circumstances in which people are currently finding themselves. For example, those who are currently cut out by the £50,000 cap or the 50% rule would still need to meet the new criteria. However, if put in place, these proposals will mean that a large proportion of people within these groups would now be included in the SEISS. These changes would also ensure that the number of employees that are able to access the CJRS is extended during any new rounds of furlough. As well as this, backdated payments for those individuals who were refused furlough between the 28th of February 2020 until the 19th of March 2020 should also be given, meaning that they are not disadvantages due to circumstances beyond their individual control.

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