Who Gets What and Why? (5)

 

I understand the Scottish Government's £500 bonus scheme is causing consternation in official circles as the scheme's problems and inconsistencies become clear.

Take 'shielding', for example, Scottish Ministers originally said that all shielding staff would receive the payment, but now they are not so sure and they may be reneging on this promise (see post below dated 20/12/20).

The interpretation of 'pro rata' is also causing big problems because it's still as clear as mud whether 'pro rata' relates to hours worked or days worked between 17 March and 30 November 2020 - the date Nicola Sturgeon first revealed the grand plan to an SNP national conference.

So how many hours or days to people have to work to qualify for the £500?

No one seems to know the answer to that question, but it means that some folk have to work far more (or far fewer) hours (or days) to get their hands on the same amount of dosh. 

Now the reason for so much confusion is that Scottish Ministers decided not to consult with anyone before making their announcement - MSPs and the Scottish Parliament were kept in the dark, as were the employers and the trade unions.

Never mind the wider Scottish public which is really quite astonishing as it's public money in the first place, of course - even if ministers are behaving as if these funds (hundreds of millions of pounds) are the property of the SNP.  

More to follow later today - so watch this space. 

   

ScotGov - Who Gets What and Why? 4 (20/12/20)

The Scottish Government announced on 30 November 2020 that all NHS and social care workers employed since 17 March 2020 would receive a £500 bonus payment.

Shielding Staff

"A pro rated payment of £500 will be made as soon as is practicable to all NHS and social care workers employed since 17 March 2020 - including staff who have had to shield, or who have since retired."

Now everyone, myself included, took this as a way of recognising all the people who risked their personal health and safety by remaining and work and keeping essential services going while the rest of us stayed at home.

But the ScotGov advice is clear - the payment applies to staff who have had to 'shield' since 17 March which seems to defeat the whole point of the exercise.

Particularly if other groups of key workers (delivery drivers, supermarket staff, refuse workers etc) have been left out and excluded from the scheme altogether. 

   

ScotGov - Who Gets What and Why? 3 (19/12/20)

 

Seems to me the Scottish Government's £500 bonus scheme has more holes than a Swiss Cheese Plant.

First of all it seems to extend to all kinds of senior officials who neither need nor deserve a £500 bonus, but it's also very confusing and complicated. 

What does pro rata mean?

2) On 30 November 2020 Scottish ministers announced (out of the blue and without any consultation) that all full-time NHS workers and social care staff would receive a £500 bonus payment - pro rated for part-timers (see quote below).  

"A pro rated payment of £500 will be made as soon as is practicable to all NHS and social care workers employed since 17 March 2020 - including staff who have had to shield, or who have since retired."

Now there are 259 days between 17 March and 30 November which works out at just under £2 per day.

Normally pro-rated means that part-time workers get a proportion of the full-time award - so if a person's hours are 50% of full-time hours, they would receive £250 less tax and National Insurance.

But do staff have to be employed all the way through from 17 March to 30 November 2020 to qualify?

What if they left employment on 1 April or only started their job  on 20 November - do they still get the full £500 or a pro-rated  smaller amount?

Next up - the ScotGov proposal seems to include staff who have been 'shielding' (ie not at work), but more of this in my next post.

   

ScotGov - Who Gets What and Why? 2 ((17/12/20)

 

The Scottish Government's scheme to pay a £500 bonus to all NHS workers and social care staff has attracted a lot of criticism which is richly deserved, if you ask me. 

So I thought I'd highlight some of the issues with the scheme which could (and should) have been addressed had Nicola Sturgeon put a serious proposal to the Scottish Parliament, instead of playing party politics by making an announcement to an SNP conference.   

Senior Officials 

1) The chief executive of NHS Greater Glasgow and Clyde is very well paid with a salary package worth over £200,000 a year including pension benefits.

Why does the First Minister think it necessary to reward such senior and highly paid officials with a £500 bonus payment?

More thoughts and observations to follow in the days ahead - so watch this space.

   

ScotGov - Who Gets What and Why? (07/12/20)

I am beginning to delve into this £500 bonus business which Nicola Sturgeon announced to an SNP conference recently without any prior discussion in the Scottish Parliament or with other relevant 'stakeholders' including the employers and trade unions.

Now I understand that this £500 payment is intended to cover 300,000 staff and will cost around £180 million which sounds  rather odd because lots of staff are part-time and won't qualify for the full £500.

According to media reports, part-time staff will receive a 'pro rata' payment presumably be based on a percentage of full-time hours worked - and there are lots of part-time staff working in the health and social care field, as everyone knows.

By my calculation 300,000 X £500 = £150 million and after factoring in the lower amounts paid to part-time staff you would expect the bill to come to significantly less than £150 million - even allowing for employers' National Insurance contribution of 13.8%.

So how does the Scottish Government come to a total of £180 million?

I don't know, but I think we should be told and there must surely be an official ScotGov circular doing the rounds since this kind of information has to be circulated to employers (NHS and council) and the trade unions.

If any readers out there can oblige, please send a copy of the circular (in confidence of course) to: markirvine@compuserve.com  

   

Scots Docs Say - "No Thanks!" (05/12/20)

Scottish doctors show more sense than ScotGov ministers after branding their £500 'thank you' payment as embarrassing and unnecessary.

The Herald reports that Highland GPs asked whether the move was 'just' when many of their patients have faced reduced earnings, jobs losses or business closures as a result of the Coronavirus pandemic.

Incredibly, the pros and cons of the payment were not debated by MSPs in the Scottish Parliament - instead the payment was just announced by Nicola Sturgeon last week at the SNP 's annual conference.

Good for the doctors, I say, because if the Scottish Government has hundreds of millions of pounds to share out, then 'Who Gets What and Why' should be the subject of a serious debate - instead of politicians playing Santa Claus in the run-up to Christmas.

  

Fairness, Covid and Taxing Bonuses (01/12/20)

The Fraser of Allander Institute (FAI) has just published an excellent article explaining why exempting bonus payments from tax is a bad idea.

If you ask me, the proposal is politically dishonest and unfair as well because the Scottish Government is recognising only some of the many key workers who have kept essential services going throughout the Coronavirus epidemic. 

Here's an extract of the analysis which gets to the heart of the matter, but follow the link below to read the FAI piece in full. 

"But exempting any bonuses from tax is not widely regarded as a good use of tax policy – regardless of which govt has the powers to do it, and regardless how much we appreciate the work done by NHS/social care workers in recent months.

"There’s a reason bonuses are taxed; if they weren’t, everyone would want paid in bonuses rather than regular pay. Making an exception to the rule once opens the possibility of endless future lobbying for tax-exempt bonuses – which is not something any government should be keen to encourage.

"More importantly, exempting bonuses from tax appears at odds with the context of the existing progressive tax system. If NHS workers received an extra £500 in normal pay, higher rate taxpayers would pay more of that in tax than basic rate taxpayers – that’s the basis of fairness on which the system is based. Exempting the bonus from tax would gift higher rate taxpayers a significantly larger tax break than basic rate taxpayers. It is really not clear what the rationale for this would be.

"So, it is perfectly legitimate – and indeed desirable – to want to recognise and reward NHS/care workers for their efforts in recent months. But if policymakers want those employees to benefit by £500 after tax, the solution is to pay a higher gross bonus. There is little reason for these rewards to be exempt from the existing social contract, or for them to require administrative and legislative hurdles to implement."

https://fraserofallander.org/scottish-economy/fiscal-policy-tax/on-exempting-nhs-bonus-payments-from-tax/