Cash for Covid: £500 payment for positive test considered by ministers

Laura Donnelly
·4 min read
Health officials are concerned that only one in six people with symptoms are coming forward for tests - Hannah McKay/Reuters
Health officials are concerned that only one in six people with symptoms are coming forward for tests - Hannah McKay/Reuters

Ministers are considering paying £500 to everyone who tests positive for Covid under plans that would cost the state almost £2 billion a month.

Health officials are understood to have drawn up the proposals amid concern that just one in six people with symptoms are coming forward for tests because some fear a positive result and self-isolation would cost them too much.

Under the current system, only those on a low income who cannot work from home and are eligible for benefits are entitled to a "support payment" of £500.

But ministers are considering replacing that system with a universal payment, meaning anyone who had a positive test could claim the funds. The move has been costed at up to £453 million a week if there were 60,000 cases a day – 12 times the cost of the current approach.

Papers that could be discussed by ministers in the coming days also suggest axing the system of payments for the close contacts of positive cases. Currently, close contacts are also eligible for payments if they are on low incomes, but the proposals suggest introducing nationwide self-testing instead so those who test negative can return to work.

The scheme is due to be considered by the Government's coronavirus operations committee, chaired by Michael Gove.

A 16-page document, dated January 19 and marked "Official Sensitive", says the option is the "preferred position" of the Department of Health and Social Care (DHSC), according to The Guardian.

A Whitehall source said the £500 payments plan was one of four on the table and more recent drafts of the policy paper did not state a preference for what is the most expensive option.

The overhaul is understood to have been prompted by Cabinet Office polling suggesting that only 17 per cent of people with symptoms are coming forward for testing, according to the policy paper. The document says: "Wanting to avoid self-isolation is now the single biggest reported barrier to requesting a test."

A separate survey carried out for the DHSC found that only one in four people reported compliance with self-isolation, while 15 per cent went to work as normal.

The current Test and Trace Support Payment system, which pays the £500 to those on low incomes who receive one of seven means-tested benefits and cannot work from home, excludes many small business owners and sole traders as well as the self-employed.

Councils have also been given an additional pot of £15 million in "discretionary" funding, with an extra £10 million recently promised.

But the review of the scheme by health officials concluded that it excludes too many people and had created a "postcode lottery", suggesting only one in four of those eligible for help received it. It said the application process was "too complex", putting forward four ways in which the programme could be overhauled.

The options other than £500 payments to anyone who tests positive are paying the lump sum only to those who test positive and cannot work from home, costing up to £244 million a week, paying those earning less than £26,495 a year or on means-tested benefits (£122 million a week), or a significant expansion in discretionary funding to councils.

People wait for Covid tests in London amid rising virus cases earlier this month - Toby Melville/Reuters
People wait for Covid tests in London amid rising virus cases earlier this month - Toby Melville/Reuters

The paper also discusses a "more radical approach" of paying people their usual earnings, but concludes that it would be difficult to assess the earnings of people on zero-hours contracts, agency workers and the self-employed and is therefore not recommended.

A senior Government source said the document was "a very early draft" which "may not even have got to ministers".

The source stressed that the blanket payment of £500 was one of a range of options but added: "We think the current system of payments and hardship funds is helping people who are in financial difficulties."

A DHSC spokesman said the department would not comment on leaks but added: "We are in one of the toughest moments of this pandemic and it is incumbent on all of us to help protect the NHS by staying at home and following the rules.

"All local authorities costs for administering the Test and Trace Support Payment scheme are covered by the Government, and each authority is empowered to make discretionary payments outside of the scheme. Fifty million pounds was invested when the scheme launched, and we are providing a further £20 million to help support people on low incomes who need to self-isolate.

"We also recognise the impact of the pandemic on people's mental health and well-being, which is why mental health services have remained open throughout the pandemic."