The Scottish Government has said it will allow taxi drivers who are claiming Universal Credit to apply for a new support grant.
Ministers changed the criteria for the new £1500 payments after pressure from the Scottish Conservatives and Labour MSPs.
However, business minister Jamie Hepburn warned they could still miss out – if the Department for Work and Pensions (DWP) considers the money as income, and deducts cash from their benefit payments.
He has now called on UK Government ministers to “do the right thing” and ensure taxi drivers do not lose out.
It came after the Scottish Government announced the change in eligibility criteria, making it clear that taxi and private hire drivers who have received state benefits at any time since March last year will now be eligible for the £1500 business support grant – so long as they meet the other conditions.
Councils will this week start to approach the estimated 38,000 drivers who could benefit, urging them to claim the cash, which is aimed at helping them cover fixed costs at a time when Covid-19 has seen their incomes fall massively.
Mr Hepburn said: “We have responded to the concerns of drivers and we have removed grant conditions relating to state benefits.
“However, we remain justifiably concerned that any payment would simply be deducted from an applicant’s benefits. That is why I am urging the Secretary of State to do the right thing by drivers on the lowest incomes.
“Without a change by the UK Government, making these payments would benefit the Department for Work and Pensions budget, not the drivers, and risk using Scottish Government resources in a way that fails to provide additional support to many taxi drivers struggling to deal with the impacts of the coronavirus (Covid-19) pandemic.”
He said the Scottish Government would “keep drivers updated ” on discussions with the DWP on the issue.