About 70% of people who apply for financial support to self-isolate due to Covid-19 are rejected, according to data from half of all England’s councils, amid warnings of a “gaping hole” in the government’s approach to the pandemic. A study of 171 local authorities found that only 36,000 people received a one-off £500 payment out of more than 120,000 applications. In one in four council areas, 90% of people were turned away. Frances O’Grady, the general secretary of the TUC, which carried out the research, said the “patchy” and “paltry” approach to reimbursing people’s lost earnings was forcing people to choose between “doing the right thing and being plunged into hardship”. “Too many low-paid workers are going without the financial support they need to self-isolate – this is a gaping hole in the UK’s public health approach,” she added. Financial support for people who need to self-isolate is critical to the government’s coronavirus strategy because the disease will continue to spread unless infectious people and their close contacts go into quarantine for 10 days. The test-and-trace support payment scheme was introduced only four months ago to support low-paid workers who will lose earnings if they cannot leave home. However, the strict eligibility criteria means that only one in eight workers qualify for the £500 payment if ordered to self-isolate, according to the Resolution Foundation. Only those on a low income who cannot work from home and receive one of seven means-tested benefits are eligible for the main support payment, excluding many small business owners, sole traders, self-employed workers and parents whose children have been told to self-isolate. The TUC study found that only 37% of applications for the main £500 payment fund were successful, as were only 20% of those who applied to the discretionary fund, which councils can use to support those who are not eligible for the main scheme. One in four councils rejected at least 90% of applications to the discretionary fund. The Guardian revealed last month that a government review had concluded that the scheme excluded too many people and was too complex to administer. Ministers are considering dramatically expanding the £500 payment, although a universal lump sum to everyone who tests positive is said to have been dismissed by the Treasury after being proposed by Matt Hancock’s Department of Health and Social Care. The survey found that demand for payments was massively outstripping the funding provided by the government. Some 35% of 169 councils had run out of their main funding allocation by 6 January, just four months after the programme was launched, while nearly one in five had run out of discretionary payments. The TUC said there was a £20.2m shortfall between the amount councils need and what the government has provided. It said this would grow to £70.6m if the same demand is replicated across England. The UK has the lowest mandatory sick pay for Covid-19 sufferers in the OECD as a proportion of the average worker’s earnings, at just £95.85 a week. The Treasury has repeatedly dismissed the TUC’s calls to increase statutory sick pay to £330 a week and extend it to all workers. A Department of Health and Social Care spokeswoman said the report “paints an incomplete picture” of the “targeted scheme” and that it was working with councils to monitor its effectiveness. She added: “Since the outset the government has covered the cost of administering the scheme and has provided local authorities with more funding to make discretionary payments to anyone outside the scope of the scheme who is facing financial hardship because of self-isolation.”