Coronavirus: Government support for self-employed throws lifeline to childminders

Chancellor tells self-employed ‘they have not been forgotten’ and launches new financial package worth 80 per cent of average monthly income.

The Government says it will pay the self-employed a taxable grant worth 80 per cent of their average income over the last three years.
The Government says it will pay the self-employed a taxable grant worth 80 per cent of their average income over the last three years.

Forty thousand self-employed childminders will be breathing a sigh of relief thanks to a major Government commitment to support them and other self-employed people.

Announcing the package of support, Chancellor Rishi Sunak said, ‘Musicians and sound engineers; plumbers and electricians; taxi drivers and driving instructors; hairdressers and childminders and many others, through no fault of their own, risk losing their livelihoods. To you, I say this. You have not been forgotten. We will not leave you behind. We all stand together.’

The money – up to a maximum of £2,500 a month – will be paid in a single lump sum, but will not begin to arrive until the start of June at the earliest. 

Wage subsidies of 80 per cent for salaried employees were announced last week.

At PACEY, which has lobbied hard for the cause of childminders, chief executive Liz Bayram said: 'The fact the Chancellor mentioned childminders in his speech shows he has listened to their concerns voiced so clearly by PACEY this week.

‘Most of our almost 25,000 childminder members are women on low incomes; some of them are single parents. This support will not only help them survive the next few months, it will also mean they are more likely to stay in business and still be providing much-needed childcare for families once the Coronavirus is beaten.’

Ms Bayram recognised that waiting till June for support will be challenging but said the extension of the business interruption loan to self-employed will help: ‘We recognise that for newly registered childminders working less than a year this will not be good news but, for most, it will make a huge difference.’

She added: ‘Our current survey shows that the vast majority of childminders want to provide the flexible, quality childcare that critical workers’ children and vulnerable children so urgently need right now. This announcement will give them the financial security they need to weather this storm.’

What the scheme delivers
There will be some work to do in examining the detail of the scheme, and the policy team at PACEY will be exploring this in the next day or so and helping its members navigate the process. There is also the recognition that for some, the proposals may not deliver the support they need.

Key points:

  • The Government will pay self-employed people, who have been adversely affected by the coronavirus, a taxable grant worth 80 per cent of their average income over the last three years, up to £2,500 per month, for at least three months.
  • Self-employed people who are eligible can apply directly to HMRC for the grant, using a simple online form; HMRC will then pay the grant straight into your bank account. The Chancellor suggested that eligible individuals will be contacted in advance. Three months allowance will be paid in one go.
  • The scheme will be open to those with income of £50,000 or less, who make the majority of their income from self-employment.
  • The scheme will not be up and running until the start of June – this is to give anyone who hasn't yet filed a tax return for 2018-19 an additional four weeks from today to do that. Universal Credit expected to fill that gap. DWP focussed on making sure advanced payment can be made within days. Extra resources into local authorities to help with things like Council Tax Bills.
  • Self-employed people who are struggling now can access the business interruption loans. They are also encouraged to use savings set aside for future tax bills.

For those that have very recently entered the self-employment workforce, HMRC will look at what data is available. If they only have one year of tax return the HMRC will average out that over three years. While there is nothing Treasury can do “ for those very recently self-employed, because of risk of fraud and so they need to refer to other support” PACEY will be actively working with its newest childminder members to identify how they can be helped so they are not lost from the childminding profession.

Concern about timings

At the Early Years Alliance, CEO Neil Leitch welcomed that the income level had been set at a more reasonable level than earlier reports had suggested but said he was concerned about the wait for support to come through.

He said: ‘ Childminders have mortgages, rents, bills and other expenses to pay right now – how, then, can they be expected to wait until the start of June for any financial support, as the government has indicated? With many are already questioning whether or not they are able to stay open to key worker families and vulnerable children during this period, it is vital that they receive wage support as soon as possible. 

‘With the number of families taking up formal childcare already falling significantly, childminders are already seeing huge drops in income from parent fees. As such, the Government must outline what interim support it is making available for childminders who are doing as it has asked and providing care for key worker families and vulnerable children during this difficult time – otherwise, it is asking them to choose between continuing to provide a vital service for families in need, and facing financial ruin."




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