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Almost 7 billion pounds for UK welfare system amid coronavirus, 80% of salary for staff kept

Christian Fernsby |
The UK government is pumping almost GBP7 billion into the welfare system to protect people's incomes during the coronavirus pandemic, chancellor Rishi Sunak announced.

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The universal credit standard allowance will be increased by GBP1,000 a year for the next 12 months, Rishi Sunak said, while the working tax credit basic element will be boosted by the same amount.

The measures to strengthen the welfare system will benefit more than four million of the most vulnerable households, he said on Friday.

But he warned: "I cannot promise you that noone will face hardship in the weeks ahead."

Self employed workers will be able to access universal credit payments in full, at a rate equivalent to statutory sick pay eligible to employees.

And the minimum income floor will be suspended for everyone affected, Sunak added.

The chancellor said the next self assessment payments will be deferred to January 2021 to further support the self employed.

The safety net will be further strengthened by extra help for renters who may struggle with payments over the coming months.

The government is pledging nearly GBP1 billion for renters through increasing housing benefit and universal credit so the local housing allowance covers at least 30% of market rents.

It is also stepping in to pick up "most of" the wages of employed workers.

The government will pay the wages of employees unable to work due to the coronavirus pandemic, in a radical move aimed at protecting people's jobs.

It will pay 80% of salary for staff who are kept on by their employer, covering wages of up to £2,500 a month.

The "unprecedented" measures will stop workers being laid off due to the crisis, chancellor Rishi Sunak said.

Firms have warned the virus could see them collapse, wiping out thousands of jobs, as life in the UK is put on hold.

Mr Sunak said closing pubs and restaurants would have a "significant impact" on businesses.

It is understood that the wage subsidy will apply to firms where bosses have already had to lay off workers due to the coronavirus, as long as they are brought back into the workforce and instead granted a leave of absence.

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