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Economy

The income support schemes and unfairness

The above two examples demonstrate how those who are already unequally treated have been further harmed by the eligibility criteria of the furlough scheme“.

Jasneet Samrai

For many, the government income support schemes have been a lifeline- having provided them with a stable income during the pandemic and the subsequent lockdowns. The successes of these schemes should not be underplayed – implementing two entirely new schemes with no existing framework is an immensely difficult task and one that we managed to do swiftly at the start of the pandemic.

Yet, whilst these schemes were impressive at the start of this pandemic, the government failed to support workers on every step since. We haven’t seen a solution for those that were excluded from these schemes, we haven’t been able to ensure that every worker achieves parity. We also haven’t seen any attempt at extending access to these schemes in order to ensure that more people are included.

Whilst millions of people being excluded from Government support schemes is alone worrying, another dimension of inequality is the reasons for which they are excluded. For example, one of the causes that we discuss within our newly released paper is employees being left without access to any governmental support after being denied access to it by their employer. This is due to the scheme itself being able to be accessed only by employers and not employees themselves. This meant that, even if workers asked to be furloughed, employers were able to deny their request. Within the UK, this was the case for up to 800,000 people.

One of the main problems with having a system where employers are able to choose who is furloughed is that it may lead to those who would benefit hugely from the scheme missing out. For example, earlier this month it was reported that 71% of working mums were denied furlough when schools were shut last year. This meant that they either still had to go to work, or had to work from home, meaning that they were unable to assist their children with their own work and having to juggle childcare at the same time as their job. Employers denying their employees furlough even though there is no other childcare available is just one example of how the governmental income support schemes, or in this case specifically the CJRS, disproportionally impacts women over men- with them making up the majority of people refused for this reason.

Moreover, the current system of employers having the power to deny all furlough requests also harms those that are vulnerable to the virus. This is because it is harmful for them to go into the workplace as transmission is higher and for them, the risk to their health is higher if they do end up catching the virus. However, employers have the ultimate choice, meaning that they could effectively be forced into their workplace even if it is unsafe to do. At the moment, the only way in which this can be challenged is by taking your employer to court and argue that they breached disability grounds. However as this is a contentious issue, and due to their being multiple interpretations of the law, there is no guarantee that this case would be won. This option is something that many people are unable to afford, especially in a pandemic with a large economic downturn. This financial burden is furthered by the fact that many households have a lower income during the pandemic period, this may be due to other members of the household having reduced hours or being furloughed themselves, thus having a reduced income.

The above two examples demonstrate how those who are already unequally treated have been further harmed by the eligibility criteria of the furlough scheme. These inequalities can only be solved by giving employees the ability to furlough themselves- the solution of which how to do so is laid out in our paper.

It is not just the CJRS scheme that is fundamentally flawed, but also the Self-Employed Income Support Scheme (SEISS). The amount that people are given by the Government on this scheme is decided by their income from 2016-2019. Whilst it seems like this method is able to achieve true parity for those who use it, the way in which the scheme has been implemented disproportionally impacts those who took maternity leave throughout this period. This means that the scheme primarily disadvantages new mothers, with them as a result receiving less money that they would have if they had not have taken maternity leave. Therefore, it is important that the calculation which determines this is not solely based on a person’s income for a set period of time, but also calculated fairly by the period in which maternity leave was taken discounted. The above examples show that the two government schemes were flawed in multiple ways. This is due to there being clear systematic inequalities within the eligibility criteria and how the income support schemes have been enacted. The paper that we have published aims to reduce this inequality for these groups of people and ensure that further inequality, with us taking steps backwards, is not a side effect of the pandemic.

Written by Jasneet Samrai, our Deputy Director.

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