Social care staff £500 to be paid next month – however it will likely be subject to taxation

Social care staff in Wales are set to receive an extra £500 payment next month – however it has been confirmed the money will be subject to taxation.

The payment, which will also be extended to agency staff and nursing staff employed in care homes, as well as personal assistants and domiciliary care workers providing care to people in their own homes, was announced by the Welsh Government in May.

Kitchen and domestic staff working in care homes will receive the £500 extra payment. It will be paid to staff who were working between 15th March and 31st May.

However there has been concern that due to tax rules the recipients would not see the full £500 payment, with tax and National Insurance contributions due, and it could also impact those who receive Universal Credit and be declared to the Department for Work and Pensions as income.

At today’s briefing with First Minister Mark Drakeford we asked for a trio of updates on requests made from Welsh Government to UK Government.

It appears there will be no waiving of tax or national insurance payments, and the payment could have universal credit implications, with the First Minister saying: “I think we are reaching the end of our discussions with the Treasury on the tax and National Insurance position in relation to the £500 we wish to pay to care staff and I’m afraid it looks as though the Treasury intends to take that money away from care staff in Wales in a way that I think is deeply regrettable and eminently avoidable.”

He added: “We will start making those payments to social care staff in Wales next month.”

We also asked for an update on suggestions for direct economic support where workers face economic challenges and choices during outbreaks, a situation Mark Drakeford called ‘perverse’,  and something that appears to have happened locally.

The First Minister said, “I’ve had no reply to my letter of what must be three weeks ago now on temporary furlough measures, remembering that that was in order to deal with a perverse incentive of people not to report being ill,  or to go to work when they know they are ill, because they couldn’t rely on statutory sick pay. And, if it’s not to be resolved in the way that we set out in our letter, it remains an important issue to resolve.”

Previously the First Minister has told us his government were trying to persuade the Treasury to allow them to transfer some money from capital budgets and use that as revenue in this budgetary year, with a target of around £200m, adding “That will make a big difference to our ability to go out and support the businesses and public services in the second half of this financial year.”

The First Minister replied, “There is a meeting next week between the Finance Ministers of the four governments of the United Kingdom. We’re hoping we may get some further news on our requests over capital to revenue conversion, access to our own reserve borrowing powers,  that little bundle of issues that we are keen to pursue with the Treasury.”

In light of ongoing noting of the lack of contact between the First Minister and Prime Minister we asked if there had been any recent meeting, but also asked if any attempt had been declined by Downing Street. The First Minister said, “I haven’t met or spoken with the Prime Minister since the 28th of May, there hasn’t been any offer of a meeting that has been declined at all.”