Millions of self-employed workers and high earners risk falling through gaps in the government's coronavirus wage subsidy and benefits system, according to two leading economics thinktanks.
The Institute for Fiscal Studies (IFS) warned that some self-employed would receive no support at all, while others could be left financially better off. Around two million self-employed people are excluded because they do not earn enough, earn over the £50,000 threshold, or have been self-employed for less than a year. A further two million who run their own company and pay themselves via dividends rather than salary also miss out, as dividends are not covered by the scheme.
The IFS noted that a quarter of self-employed individuals may end up better off even if their business shuts down, if benefits exceed the 20% of lost earnings not covered by the state. However, workers who lose their jobs entirely, take unpaid caring leave, or face reduced earnings while continuing to work could be worse off.
The Resolution Foundation urged the chancellor to expand universal credit and scrap rules that reduce support for those with savings over £6,000 or exclude those with over £16,000. The foundation's Karl Handscomb said the benefit system must be 'battle ready' for the economic fallout, warning some people may miss benefits they are eligible for.
