Helping people through the Covid-19 pandemic
The government has now moved in to the Delay phase of its coronavirus action plan. The focus has rightly been on public health, NHS readiness, and targeted support.
As the situation develops, and the government’s response broadens, it will be increasingly important to support the financial and social resilience of individuals and families. If people cannot afford to self-isolate without fear of debt, disconnection, or eviction, this will undermine the public health response. And in the long-term there is a risk that a temporary crisis could translate into lasting economic harm.
This briefing paper shares policy options to mitigate these risks. Because the situation is fast-moving, we present a range of options, some appropriate now and others appropriate only if or when the crisis escalates. All the measures presented would be temporary and some could apply for only a short period at the peak of the pandemic.
A theme running through the paper is that it will be vital to share the financial burden of the coming months fairly between government, business, individuals and families.
At Citizens Advice we know that many families in England and Wales go into this crisis with little resilience - around 7 million people have no savings at all. It is in everyone’s interests that we help vulnerable people through these difficult times.
Our key recommendations:
Employment: provide SSP at 80% of their wage for people earning less than the Lower Earnings Limit; suspend the Minimum Income Floor for all self-employed people for 1 year; suspend NI contribution requirements for contributory ESA.
Universal Credit: make advance payments a grant for those advised to self-isolate; make maximum use of repayment breaks for benefit debt and third party deductions; loosen housing element rates.
Housing: issue guidance to landlords on how to treat renters in arrears; suspend section 21, to reduce faultless evictions, and amend the grounds under which a section 8 order can be made to ensure people are not being evicted as a consequence of being in arrears due to coronavirus; Social Housing Regulator should write to all housing associations to set out expectations of support for people with rent arrears.
Mortgages and other debts: Institute mortgage and loan holidays, with no higher costs and options for how delayed payments are repaid, and ensuring credit ratings aren’t affected; finance industry-wide forbearance for all debts; amend council tax regulations to ensure councils are not liable for annual bill when they miss a payment; councils should avoid using court and enforcement action.
Essential Bills: Use the existing Cold Weather Payment to provide support for self-isolating households paying higher energy bills in receipt of Universal Credit or legacy benefits; ensure suppliers have processes in place for self-isolating people to top up legacy and smart prepayment meters; suspend disconnections for the period of the crisis.
Consumer protection: Ensure intelligence sharing is working across the enforcement landscape; preemptively ban unsolicited marketing on products that make claims about helping consumers deal with coronavirus.