Redundant responses: Despite aid, millions slip through the net

The US is now mailing the second round of stimulus checks worth $1,200 to residents on low-to-medium incomes. Britain, meanwhile, took great pains to announce that the country’s aid program for furloughed workers would be worth 85% of monthly salaries — a higher rate than even Sweden.

The reality for millions of people, however, has been quite different. In Germany, for example, freelance workers and the self-employed — especially those in the creative sector — have complained that they are not entitled to either state help meant for workers or companies. A survey by Kantar for the Welt am Sonntag newspaper last week estimated that 2.1 million Germans were facing ruin as a result.

“The emergency aid only works to a limited extent,” Dagmar Schmidt, chairwoman of the Federal Association of Fine Artists (BBK), told the Rheinische Post. She noted that in the states of Berlin and North Rhine-Westphalia, “the pot was emptied quickly” and that those who didn’t apply for financial help early enough were rejected for technical reasons.

Four more months to wait

US stimulus checks were delayed for a few days so that US President Donald Trump’s name could be added to them. Although tens of millions of people who received their cash into their bank account have now been paid, those waiting on checks have been told they may only receive them as late as September.

Unemployment in the US has skyrocketed to 36 million, but several states have struggled to handle the sudden and unprecedented increase in claims for financial support. Florida, for instance, has paid out to less than half the 1.4 million claimants who registered for unemployment benefits between March 15 and May 12, according to official state data.

Two lawyers who have asked a court to force Florida authorities to speed up the processing of unemployment claims say the “system is broken” as a result of deep public sector cuts over the past decade. The pair have accused the Department of Economic Opportunity of breach of contract with the public, but the first judge who heard the case rejected their claims.

Britain bowed to pressure that its aid package left out the country’s 4.7 million self-employed workers. Ministers introduced a separate scheme, which will only start paying out from June, and only to those who registered with tax authorities more than a year ago. That rule alone is likely to leave at least 200,000 people ineligible, let alone those working in the gig and black economies.

The Association of Independent Professionals and the Self-Employed has urged the UK government to “not forget the groups that have not got the support they need,” noting that many people have been forced to revert to the Universal Credit welfare system, with barely 400 pounds ($488) a month to live on.

The University of Bristol said in a recent report that during the first week of April alone, 25% of UK households had lost earnings and that only two-thirds of them were likely to be covered by the various coronavirus-related schemes. Researchers calculated that 10% of UK households had no option but to rely on the basic welfare system.

“The pandemic is hitting people’s finances harder and faster than the last economic downturn ... it is affecting people in all parts of the country equally,” the report’s author, emeritus professor Elaine Kempson, wrote.