People facing restrictions in West Yorkshire could soon get Government payments of £182 if they are forced to self-isolate.
It comes as a trial scheme starts in Blackburn with Darwen, Oldham and Pendle, which also has high numbers of Covid-19 cases.
From Tuesday September 1, people in those areas on Universal Credit or Working Tax Credit, who are required to self-isolate and are unable to work from home will benefit from the new payment scheme.
Eligible people who test positive for the virus will receive £130 for their 10-day period of self-isolation, while other members of their household, who under the current rules have to self-isolate for 14 days, will be entitled to a payment of £182.
The scheme is expected to be rolled out to other areas facing restrictions.
Health Secretary Matt Hancock has defended the level of compensation payments - equivalent to £13 a day.
Mr Hancock told ITV News the payments were "set at the level of statutory sick pay in order to make sure that people don't lose out from doing the right thing."
But Pendle Borough Council leader Mohammed Iqbal said: "The figures that the Government have introduced are really a slap in the face for those people who sadly test positive and there is no incentive in my opinion for those people to self-isolate.
"If you're a manual worker who's not able to do their job from home, normally getting paid the living wage or the minimum wage, the Government are now going to say to you we'll pay you £4.55 an hour. Not acceptable."
Anneliese Dodds, Labour's shadow chancellor, raised concerns the scheme would only apply to a limited number of areas.
She said: "The instruction to self-isolate applies to everyone in the country, so everyone should get the support they need to self-isolate."
Meanwhile a decision is expected on Thursday on whether local lockdowns should continue in Bradford, Calderdale and Kirklees after a meeting of the Joint Biosecurity Centre (JBC), chaired by Health Secretary Matt Hancock and England’s chief medical officer Professor Chris Whitty.
Last week Mr Hancock announced a more targeted approach to restrictions, in which the views of MPs would also be sought to gain “the maximum possible local consensus”.
The leader of Kirklees Council in West Yorkshire said the restrictions in place are “confusing” and urged the Government to lift restrictions for the whole of Kirklees.
Shabir Pandor said: “My position is clear, these restrictions are confusing and are not working. We can bring our rates down without them in place.
"We understand our communities and we will continue with the great work we’re doing on the ground to target areas in Kirklees with higher rates, making sure people have all the information and support they need to stay safe and prevent infection.
"The current restrictions are keeping us from visiting our friends and families in a safe way. How is it right that you can go to a pub or restaurant that is full of people you don’t know, but you cannot visit a relative in their garden?”