The party said health and care staff should receive a financial bonus just as military personnel do when on active duty.
The move is part of a “frontline support package” unveiled by the Lib Dems.
The initiative also includes calls to fast track the procurement of personal protective equipment (PPE).
Acting Lib Dem leader Sir Ed Davey said: “The fight against coronavirus is seeing several million key workers risking their lives to protect others. NHS and care staff are truly on the frontline in this national struggle – putting themselves in danger and working long shifts.
“In our hospitals, care homes, hospices and in the wider health and care sector, an army of workers are protecting us.
“The top priority for frontline staff is protection.
“We should never ask our military to risk their lives without the proper kit, and we shouldn’t be leaving health and care workers without sufficient protective kit either.
“When the country emerges from this crisis, we must also properly recognise those who were willing to serve and make a sacrifice, just as we do with military forces.
“The government must look at creating a frontline service reward, similar to the deployment allowance frontline troops receive.
“There are many low-paid workers on the coronavirus frontline, and we must show our gratitude.”
Other measures in the initiative include providing more practical help for NHS and care staff such as getting hotels to provide accommodation for key workers self-isolating, or who have vulnerable people in their household.
And the Lib Dems want the government to pay for the funerals of key workers who died trying to protect others from Covid-19.
The frontline service reward would be for the duration of the lockdown, the party said, adding that all key workers should also receive a coronavirus service medal.
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