Why are so many claims for test and trace support being rejected?
Flagship BBC news programmes are highlighting that a huge number of applications are being rejected. We explained last week how a simple reform to the Test and Trace Support Payment scheme could unblock the problem so as to turn the payment into the major weapon against the spread of Covid which it ought to be. Before looking at reforms, though, it is important to be clear what’s wrong. What it boils down to is arithmetic.
The crucial piece of information for understanding what’s going on is the number of people who should be able to get a self-isolation payment through the ‘discretionary’ part of the scheme. We hear every day about how many people have tested positive – more than 70,000 over the first two days of this week and some 2.6 million since the payment scheme began at the end of September. The question is: how many workers would we expect to qualify for the £500 payment as a result?
We estimate that for every 100 positive cases, 49 workers would be required to self-isolate who: cannot work from home AND have a household income (once their earnings have stopped) that is low enough to qualify for Universal Credit AND are not already receiving Universal Credit. These are the people whom the discretionary part of the scheme is there to support.
The assumptions we have made to reach this figure are set out in this document Table explaining 49 in 100 figure.docx. The most important (drawing on previous research) is that half of all people in a job either claim Universal Credit already or would become entitled to claim it if their earnings suddenly stopped.
The pot of money for the discretionary scheme was fixed at £15m – enough for 30,000 payments of £500 each. Based on our analysis, the 70,000 plus new cases so far this week will themselves have generated more than 30,000 potential claims for the payment. So a sum of money that was set for four months is actually sufficient for just two days. This – the tiny size of the discretionary pot compared with the number of workers who in principle qualify for it – is what lies behind the horror stories now being reported.
Even if cases continue to come down quickly, the money the Government was putting into the discretionary scheme for four months is the sort of sum it actually needs to be putting in every four days.