Government Financial Support for Individuals - General Discussion

[bramling]

Mod Note: Posts #1 - #23 originally in this thread.

What about people who are working? Fine them a few days' wages? I think there's a country in Scandinavia which does that sort of thing.

I wouldn't include people working.

However, for people fortunate enough to be receiving a generous payment of public funds it's not unreasonable to expect in return that they abide by some basic conditions.

 

[Bletchleyite]

The furlough scheme is not a free paid holiday nor is it a subsidy to managers' pockets of companies that are fully operating. It's a means to ensure that people who companies can't afford to pay can remain on the books and are not destitute.

So yes, it's important it's not abused.

 

[bramling]

The furlough scheme is not a free paid holiday nor is it a subsidy to managers' pockets of companies that are fully operating. It's a means to ensure that people who companies can't afford to pay can remain on the books and are not destitute.

So yes, it's important it's not abused.

One could take it a stage further and say it's a bail-out for people's failure to save. £2.5k per month is more than is required to simply prevent people becoming destitute. One presumes the chancellor is hoping that some of this will find its way back into the economy. One way or other we're going to be paying for it through taxation.

 

[Ianno87]

One could take it a stage further and say it's a bail-out for people's failure to save. £2.5k per month is more than is required to simply prevent people becoming destitute.

No, it really isn't that at all. It's to keep employees in "warm store" until things pick up again. To support the most rapid return to normal business possible.

Paying these people unemployment benefit would be the alternative...still at a cost to the taxpayer regardless, compounded by loss of skills/knowledge making normally business much harder to recover.

 

[bramling]

No, it really isn't that at all. It's to keep employees in "warm store" until things pick up again. To support the most rapid return to normal business possible.

Paying these people unemployment benefit would be the alternative...still at a cost to the taxpayer regardless, compounded by loss of skills/knowledge making normally business much harder to recover.

It kind of is, as if people had savings to fall back on then they could be put on unpaid leave (which ISTR was what some companies initially started doing).

I'm not advocating that, however by the same token the current package is generous, and I see no reason why something in return shouldn't be expected. Not going on a day trip to the Lake District really isn't too much to ask.

 

[Bletchleyite]

It kind of is, as if people had savings to fall back on then people could be put on unpaid leave (which ISTR was what some companies initially started doing).

I don't think you can really blame people in low-paid jobs for not having savings, can you? Particularly where the interest rate means money in any bank account is depreciating like mad.

Complaining about people not having savings is very much middle-class rage.

 

[Domh245]

One could take it a stage further and say it's a bail-out for people's failure to save. £2.5k per month is more than is required to simply prevent people becoming destitute. One presumes the chancellor is hoping that some of this will find its way back into the economy.

Firstly, it's 80% up to £2.5k so if you're on minimum wage working 40 hours a week that's only £1.1k. And whilst you may see it as a bail-out for people's failure to save, it's not really - it's a way of levelling the playing field. Let's say two people have been saving up, one is a 20-something saving up for a mortgage, and the other is a 40-something saving "for a rainy day" and both are furloughed but suppose the 80% thing isn't introduced. It seems pretty unfair to penalise the 20-something who's been saving everything they can to buy a house whilst the 40-something is able to save for exactly this kind of thing, and that's before considering how hard it can be to save.

Also, surely it'll be making it's way back into the economy anyway? I don't think m(any) people receiving it will just hoard it away - it'll be used to pay rent, buy groceries, etc - it's not going to just suddenly

 

[Bletchleyite]

Also, surely it'll be making it's way back into the economy anyway? I don't think m(any) people receiving it will just hoard it away - it'll be used to pay rent, buy groceries, etc

Exactly, it's not just a means of stopping people going hungry, it's a means of keeping (what's left of) the economy moving too. The reason for doing 80% is I suspect so people will, if viable, prefer to work and get paid the full amount.

 

[Ianno87]

I don't think you can really blame people in low-paid jobs for not having savings, can you? Particularly where the interest rate means money in any bank account is depreciating like mad.

Complaining about people not having savings is very much middle-class rage.

Got a friend couple who live together - they both work in solid but not-amazingly paid jobs in retail. After rent, bills etc the notion of meaningful savings each month is near-fanciful to them. (They economise and don't have a car, for example and can walk to work). Even their 80% furlough pay leaves things pretty 'tight' until this is over.

 

[Bletchleyite]

Got a friend couple who live together - they both work in solid but not-amazingly paid jobs in retail. After rent, bills etc the notion of meaningful savings each month is near-fanciful to them. (They economise and don't have a car, for example and can walk to work). Even their 80% furlough pay leaves things pretty 'tight' until this is over.

TBH only giving people on the minimum wage 80% is quite raw. I'd have made it bottom out at the minimum wage, personally.

 

[Ianno87]

TBH only giving people on the minimum wage 80% is quite raw. I'd have made it bottom out at the minimum wage, personally.

Needless to say, the absolute last thing on their minds right now is a jolly to the Lake District!

 

[bramling]

TBH only giving people on the minimum wage 80% is quite raw. I'd have made it bottom out at the minimum wage, personally.

Yes personally I'd have made that more of a priority than going up to £2.5k.

 

[bramling]

Needless to say, the absolute last thing on their minds right now is a jolly to the Lake District!

Yet people have apparently been caught doing just that. If that was someone on furlough then I'd be having that stopped right away - it certainly isn't being paid to fund a long-distance car journey.

 

[Bletchleyite]

Yes personally I'd have made that more of a priority than going up to £2.5k.

My original thought was just to give the full minimum wage to everyone who can't work.

 

[Ianno87]

Yet people have apparently been caught doing just that. If that was someone on furlough then I'd be having that stopped right away - it certainly isn't being paid to fund a long-distance car journey.

It should be stopped regardless of whether they're furloughed or not (you seem to have a particular chip on your shoulder about people on furlough given that there's nothing to suggest such people are any more or less likely to be abusing restrictions than anybody else)

 

[JamesT]

My original thought was just to give the full minimum wage to everyone who can't work.

How would you handle people with multiple jobs if that was the scheme?

 

[Bantamzen]

One could take it a stage further and say it's a bail-out for people's failure to save. £2.5k per month is more than is required to simply prevent people becoming destitute. One presumes the chancellor is hoping that some of this will find its way back into the economy. One way or other we're going to be paying for it through taxation.

So now the fact that people are getting help because the government have effectively rendered them temporarily unemployed (using measures you approve of, and wish to see enforced) irks you? How would you have people live, because the last time I was in the supermarket things were not free. Many of the people receiving furloughed pay (or at least will do at some point as the system isn't live yet) don't have the opportunity to save, because you know, their wages just about cover the cost of living.

This is the kind of thinking I'd expect to see in the comments section of a Daily Mail article quite frankly.

My original thought was just to give the full minimum wage to everyone who can't work.

And what about people whose general expenses might exceed that? The minimum wage is just about enough to scrape out a living, no more. Using that bar would mean an awful lot of people would have an even bigger pay cut than the 20% they will be experiencing under furlough. How long do you image people would put up with that?

 

[Bletchleyite]

How would you handle people with multiple jobs if that was the scheme?

They would get the minimum wage for each job they do for the number of hours they normally work on that job. I meant the full rate.

 

[Bletchleyite]

And what about people whose general expenses might exceed that? The minimum wage is just about enough to scrape out a living, no more. Using that bar would mean an awful lot of people would have an even bigger pay cut than the 20% they will be experiencing under furlough.

The 80% is capped at £30K pa, so that will apply to some people anyway. Those who are paid more are more likely to have good credit lines available to them, i.e. overdrafts and credit cards.

 

[Bantamzen]

The 80% is capped at £30K pa, so that will apply to some people anyway. Those who are paid more are more likely to have good credit lines available to them, i.e. overdrafts and credit cards.

It will, but minimum wage is considerably lower than £30K pa, using that as the standard for a universal benefit would leave an awful lot of people in financial trouble. As for suggesting people drive themselves into debt / further debt, I don't even know where to start with that suggestion!

 

[Iskra]

My original thought was just to give the full minimum wage to everyone who can't work.

I think the current arrangement is pretty generous. Allows companies to top up at their discretion too. And when you combine it with the £500 interest free overdraft and 3-month mortgage holidays available, most people should be okay.

Full minimum wage would be a big cut for a lot of people. People with higher (I don't mean the rich) earnings tend to have higher bills, so on minimum wage they would have a higher shortfall ...retribution would be swift at the next election.

 

[yorksrob]

One could take it a stage further and say it's a bail-out for people's failure to save. £2.5k per month is more than is required to simply prevent people becoming destitute. One presumes the chancellor is hoping that some of this will find its way back into the economy. One way or other we're going to be paying for it through taxation.

Having everyone save loads and loads isn't generally that good for the economy (as the Japanese experienced in the 90's 00's), however I dread to think what the effect on the economy would be if everybody felt the need for evermore to save enough to tide them through a crisis where they weren't allowed to work for an indefinite period of time.

 

[Bletchleyite]

Having everyone save loads and loads isn't generally that good for the economy (as the Japanese experienced in the 90's 00's), however I dread to think what the effect on the economy would be if everybody felt the need for evermore to save enough to tide them through a crisis where they weren't allowed to work for an indefinite period of time.

And remember that low interest rates are a tool to encourage spending.

 

[yorksrob]

And remember that low interest rates are a tool to encourage spending.

Indeed. Economic prosperity isn't just about having lots of money. It's about it moving around. This will be true after this crisis as well as before.

 

[Islineclear3_1]

And when you combine it with the £500 interest free overdraft and 3-month mortgage holidays available, most people should be okay.

Until the pandemic is over and it's payback time. Taking a mortgage holiday isn't free; the banks will charge you more interest for the privilege, which is fine if you can overpay; otherwise the money/interest owed will be tacked on to the end of the mortgage term

 

[ainsworth74]

I think it's worth pointing out, as I feel like some might have forgotten, but the money that people are getting whilst on furlough is from their employer. They remain employed and continue to receive their wages as normal (though potentially only at 80% of their usual wage) via the normal mechanism. The difference is that the employer can go to the Government to get up to 80% of the employees usual wage paid for by the Government. There's just some posts floating around that make it sound like it is the employee who is getting money directly from the Government and that isn't what's happening.

 

[Bantamzen]

I think it's worth pointing out, as I feel like some might have forgotten, but the money that people are getting whilst on furlough is from their employer. They remain employed and continue to receive their wages as normal (though potentially only at 80% of their usual wage) via the normal mechanism. The difference is that the employer can go to the Government to get up to 80% of the employees usual wage paid for by the Government. There's just some posts floating around that make it sound like it is the employee who is getting money directly from the Government and that isn't what's happening.

This is correct. Once the HMRC system goes live it will be the employer that will apply for the grants, which in turn will be based on 80% of every employee's wage as at the end of February up to £2500. This is then paid to the employer, who in turn pays it to the employee along with any top up to 100% that the employer wishes to pay (they are not obligated to pay anything more BTW). Tax, NI and any other deductions will still be applied by the employer.

The full details are available via the link below:

[Withdrawn] Check if your employer can use the Coronavirus Job Retention Scheme

Find out if you’re eligible, and how much your employer can claim if they put you on temporary leave ('furlough') because of coronavirus (COVID-19).

www.gov.uk

 

[Islineclear3_1]

If you are unable to work because your employer's operations have ceased, or have been severely affected by the coronavirus, your employer may furlough you (through mutual agreement). Although you will still be paid (80%), it is your employer who applies for the government grant (not you) that will cover the 80% wages, up to £2,500 per month, plus NI and pension contributions (if you pay in of course)

I believe the furlough period, at present, covers a period of 3 months from 1st March

I am a little surprised that the scheme hasn't gone ive yet

 

[Bantamzen]

If you are unable to work because your employer's operations have ceased, or have been severely affected by the coronavirus, your employer may furlough you (through mutual agreement). Although you will still be paid (80%), it is your employer who applies for the government grant (not you) that will cover the 80% wages, up to £2,500 per month, plus NI and pension contributions (if you pay in of course)

I believe the furlough period, at present, covers a period of 3 months from 1st March

I am a little surprised that the scheme hasn't gone ive yet

I believe it requires a new interface being built onto the gov.uk site, so needs build time, beta testing (which is apparently underway) etc.

 

[Islineclear3_1]

So how does a company furlough its staff if they can't (yet) claim the grant and they don't have the reserves to pay their staff...?

I don't expect you to answer that, just a general question