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Councils stop offering £500 self-isolation payments to those on low incomes as cash runs out

Councils stop offering £500 self-isolation payments to those on low incomes as cash runs out

People on low incomes who are told to self-isolate are no longer able to claim a £500 Test and Trace support payment in some areas as funding provided to local authorities has begun to run out, MoneySavingExpert.com can reveal - even though the scheme had been expected to run until the end of January.

Earlier this year, the Department for Health gave £50 million to 314 local authorities in England to fund £500 payments for residents who'd been told by NHS Test and Trace to self-isolate for 14 days and were unable to work as a result. This funding was split in two - £35 million for guaranteed payments for workers on certain means-tested benefits, and £15 million for discretionary payments to those who don't qualify for the main scheme but are on a low income or facing financial hardship.  

But MoneySavingExpert.com has found some local authorities have already run out of cash to make discretionary payments and have been forced to close this element of the scheme completely, while others have resorted to using cash from their own coffers to cover the shortfall but say they can't commit to this indefinitely. The Department for Health won't top-up discretionary payments, although it will consider topping up the guaranteed element of the scheme, which some councils have also warned they could run out of funding for.  

See our Coronavirus Benefits guide for full info on how the payments work, plus details of similar schemes offered in Scotland, Wales and Northern Ireland.  

Where has funding run out?

We haven't asked every authority in England if it's run out of funding - we've only done spot checks on a small sample. But we've identified at least five local authorities which have now run out of cash to fund discretionary payments: 

  • Three councils say they've stopped taking applications for discretionary self-isolation payments entirely, as they have no more funding. These are Charnwood Borough Council in Leicestershire, East Staffordshire Borough Council and Selby District Council in North Yorkshire. East Staffordshire Borough Council, which is subject to tier three coronavirus restrictions, told us its allocation of just under £30,000 had been "fully spent".

  • Two councils have run out of funding but are still taking applications as they're continuing to fund discretionary payments with other cash for now. These are Blackburn with Darwen Borough Council in Lancashire and Plymouth City Council in Devon. 

A further 12 councils we spot-checked were still offering discretionary payments.

'It's not fair - some local authorities still have funding, others don't' 

We were first alerted to the issue by MoneySaver Liz, a support worker from Burton, East Staffordshire. The 45-year-old was told to self-isolate for 14 days by NHS Test and Trace after her housemate was diagnosed with coronavirus. 

But she says she'll have to take on extra shifts when she goes back to work to make ends meet as her local authority has run out of discretionary funding and Liz isn't on benefits, which means she doesn't qualify for the main scheme. In the meantime, Liz is relying on statutory sick pay of £95.85 a week to help cover her mortgage and bill repayments. 

She told us: "What’s upset me most is that it’s common knowledge the Test and Trace payments exist. Yet when it comes to actually claiming, some local authorities still have funding while others don't.

"It's not fair. I've worked in care homes right the way through this pandemic and it's been a really hard year. But when you come to do the right thing by staying at home, you end up doing the wrong thing for yourself financially."

Who can claim a £500 Test and Trace support payment?

If you’ve been told to self-isolate on or after 28 September 2020, you could be eligible for a £500 Test and Trace Support Payment if you live in England and meet all of the following criteria:

  • You’ve been told to self-isolate by NHS Test and Trace either because you’ve tested positive for coronavirus or have recently been in close contact with someone who has tested positive
  • You’ve responded to messages received from NHS Test and Trace and provided your contact details and where you’ve tested positive, and the details of your contacts
  • You’re employed or self-employed
  • You’re unable to work from home and will lose income as a result of self-isolating
In addition, you'll need to qualify for one of the following reasons:

  • For the guaranteed payment, you must currently receive at least one of the following benefits: universal credit, working tax credit, income-based employment and support allowance, income-based jobseeker’s allowance, income support, housing benefit, pension credit.

  • For the discretionary payment, you must be on a low income and facing financial hardship as a result of not being able to work while self-isolating. It's ultimately up to each local authority who qualifies for this though, so there's no set England-wide income threshold. 

For more details and how to apply see £500 support payment help

What should I do if my council has run out of cash?

If your council has run out of discretionary funding your options are sadly limited, but here's what you can try: 

1. Double-check if your council will make discretionary payments from its own coffers. Some councils that have run out of discretionary funding are still making payments by utilising cash from elsewhere in their budgets. If you're unable to apply, it's likely to be because the council has decided that it can't fund this from its own coffers - but it's worth getting in touch and asking.

2. Apply for statutory sick pay (SSP). SSP is paid from the first day of self-isolation and eligible individuals are entitled to a minimum of £95.85 a week, although some employers may pay more. To get it, you need to be employed and earning at least £120 a week. You can't get it if you've already received the maximum of 28 weeks' SSP, you get statutory maternity pay, or you're self-isolating because you've returned from overseas. For full info see our Statutory Sick Pay guide. 

3. Check if you're eligible to claim benefits. If you're on a low income it's worth checking you're not missing out on benefits as some, such as universal credit, can still be paid to those even while in work. See our Coronavirus Benefits guide for full details on the benefits you may be able to claim and how to go about doing so. 

What does the Government say?  

A Department of Health and Social Care spokesperson said: “The Government is covering local authorities’ costs for administering the scheme. We have already made an initial £50 million available to local authorities and are working closely with them to collate information on how the scheme is progressing.”  

The Local Government Association, which represents local authorities, called on the Government to step in and provide more cash. A spokesperson said: "It is vital that councils continue to be able to provide this support to prevent hardship and control the spread of the virus. If the evidence shows that councils will not be able to do this then it is vital that Government ensures that additional funding is made available as soon as possible."

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