Universal free testing for coronavirus is also set to be drastically scaled back from April.
But the move has prompted opposition anger, with critics branding it another attempt to divert attention away from scandals such as the ongoing police investigation into claims of lock-down busting parties in Downing Street.
“Since the first lockdown almost two years ago, the lives of people in our country have been dictated by the laws regarding coronavirus,” said Emma Lewell-Buck, who has represented the town in the House of Commons since 2013.
“This virus will be with us for the long haul, as a society we need to learn to live well with Covid.
“Restrictions needed to end at some point, but only once there were clear guidelines and plans in place to protect and allow those who are clinically vulnerable to also live safely.
“Instead the Prime Minister has once again prioritised himself, fending off a no confidence vote from his backbenchers by giving them what they wanted.
“Scrapping free tests, isolation payments and woeful levels of sick pay will create a situation where those key workers who have never stopped throughout the pandemic are financially penalised for behaving responsibly.”
Under the proposals unveiled by Johnson, which are yet to be formally approved by Parliament, those who test positive for Covid-19 will still be advised to stay at home for at least five days, but will not be obliged to under law.
Changes to sick pay rules and employment support introduced to help workers through earlier stages of the pandemic are expected to end on March 24.
The government is also due to instruct school leaders to reduce the amount of screening they have in place.
According to the latest figures, one further person has died in South Tyneside following a confirmed case of Covid-19, with an additional 58 infections identified in the borough.