Coronavirus: Big increase in numbers claiming unemployment-related benefits

Monday 22 June 2020 5.32pm

The coronavirus pandemic is affecting many areas of our daily lives and is likely have a significant impact on Herefordshire's economy, at least in the short to medium term. Data and intelligence are emerging all the time and will be vital to helping us understand the effect the virus is having.

The claimant count is a measure of the number of people claiming unemployment related benefits.[2] Last month (April) saw the biggest monthly rise in claimant count in UK since modern records began in 1971. The local records shows a similar picture and May saw a further significant increase.

Overall, both the April and May 2020 claimant count in Herefordshire was higher than at any point during the last recession caused by the Financial Crisis of 2008. The total number of claimants in May 2020 was 5,065, which represents a 140% increase since March and compares to a 114% rise from March to May in the UK as a whole. The index chart below shows the long-term trends, and illustrates how significant the impact of the pandemic has been in the last two months even compared to the Financial Crisis of 2008-09.

Monthly changes in the benefit claimant count between January 2008 and May 2020

Data source:  Office for National Statistics

In Herefordshire, as at 31 May 2020, 20,700 people (28% employees resident in the county) have been furloughed under the government's Coronavirus Job Retention Scheme, which is currently due to run until October. From August 2020, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work and businesses will be asked to contribute.[3] Further job losses may occur at this point, as some employers will not be able to pay a proportion of their employees’ salary.

So far (31 May 2020), 8,400 claims have been made under the Self-Employment Income Support Scheme: a take up rate of 66%.[4]

[1] The total claimant count is the sum of the number of people claiming Job Seekers Allowance (JSA) and the number of people claiming Universal Credit required to seek work.

[2] Under the scheme furloughed workers across UK continue to receive 80% of their current salary, up to £2,500.

[3] From August, employers will pay employer's National Insurance contributions and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.

[4] Take-up is based on total number of claims to date (excludes error and rejected cases) over total potentially eligible population (includes error and rejected cases).