Source · Select Committees · Home Affairs Committee
Recommendation 52
52
Rejected
Paragraph: 192
Increase general award for lost earnings to at least next year's National Living Wage.
Recommendation
We recognise that it might be possible to reflect better the losses incurred by some individuals by looking at pay levels in the sector they worked in, regardless of the direct evidence of the wages they can provide. The Government should consider this as an option in individual cases. However, given that this will not apply for many individuals, and given the risk of further delays, we recommend increasing the general award to at least next year’s National Living Wage of £9.50 per hour given that most people have still not yet received their payments and the 2019 minimum wage is an arbitrary figure to choose. Based on an average full-time working week of 37 hours, this would raise the general award to £18,278 per year, or £1,523.16 per month. Going forwards, the tariff used should be based on at least the National Living Wage being used when the payment is made. Loss of pension and loss of future earnings should be brought within scope of the scheme: a set award or general tariff would ensure all eligible individuals are compensated regardless of available evidence. The complexity of this issue should not preclude the Home Office from implementing a solution: at the very least, the Department should consider the legal minimum employer pension contribution, which is currently three per cent.
Government Response Summary
The government rejects increasing the general award to align with future National Living Wages, justifying the use of the 2017 National Living Wage for consistency and speed, and explicitly states the scheme excludes occupational pensions.
Paragraph Reference:
192
Government Response
Rejected
HM Government
Rejected
How compensation is calculated for losses in employment has been very carefully considered to be as generous and simple as is reasonably possible. We have designed the loss of access to employment category to allow us to better acknowledge, and therefore compensate individuals for the situations and circumstances they have found themselves in. Changing the tariff to align with a changing National Living Wage would be a disadvantage to those whose compensation claims are resolved more quickly so it is important to have one constant tariff. We have pegged the tariff to the 2017 National Living Wage because most losses that may have occurred due to an inability to prove status have occurred prior to 2017 and for any losses following 2017 it is much more likely to be able to find documentation which can provide an accurate compensation amount. Across all categories our aim is to provide compensation in a way that is not complicated for our claimants or requiring and excessive amount of evidence which would delay the conclusion of a claim. The Scheme excludes impacts or losses related to occupational pensions. Where a claim is accepted under loss of access to employment or benefits, the Government will seek to ensure that the individual’s National Insurance position is corrected so the period of the loss does not impact their State Pension entitlement. Arrangements for this complex area, building on experiences from the Compensation Scheme so far, are being finalised across Government.