Indeed I know a lot of workers in the passport office but don't personally work in this sector.
It's not paid holiday, striking is time unpaid unless the union subs you which is about £35 a day and not everyone will get this, nor everyday. It's only reserved for long term hardship cases. They are taking a huge financial hit doing this. Losing a months wage
Most leave will be stopped/cancelled or hugely reduced for all staff during this period in an attempt to work the backlog. Overtime is stopped for those who strike, they cannot participate during the strike and for sometime after. Agency staff might be possible but at a cost that could be invested into long-term staffing so it's a waste of government money.
Those of us in the CS who WFH during the pandemic worked during COVID positive tests and illhealth because we were at home and it was encouraged due to such high workloads. We weren't sent home to do nothing. I was home schooling two children, looking after dependants and working 12 hour days having to meet targets. We didn't get anytime off as you seem to allude to. Burnout rates where very high and many staff moved on.
I don't know what these additional financial incentives are as none of us have ever had them. We don't get bonus payments or rewards etc we get our wage. A wage that's been frozen or very minimally increased for years and the lower brackets are being increased to meet minimum wage, the other grades are stagnant for many.
There's a whole host of reasons for these strikes but yes your information is inaccurate