22 October 2020
Rishi Sunak announces enhancement to Job Support Scheme
02/11/2020: Due to the Government's recent announcement, the furlough scheme has been extended throughout November.
The Chancellor of the Exchequer, Rishi Sunak, announced that the new Job Support Scheme (JSS) is to be made more generous for employers.
The JSS is the successor to the furlough scheme, which has been used by 1.2 million employers nationwide. The furlough scheme finishes at the end of October and the JSS is due to begin on 1 November 2020.
Whereas furloughed workers were not permitted to do any work for their employer, the Job Support Scheme is a “short time working scheme”. It requires workers to work a minimum amount of their normal hours, paid for by their employer. Then, the Government and the employer will pay a proportion of the employee’s wages for each hour not worked.
When originally announced, it was planned that workers would work at least 33% of their usual hours, paid for by the employer. Then, for each hour not worked, the Government and the employer would pay a third each (with the Government’s contribution capped at £697.92 per month).
Today’s announcement has revised the scheme so that workers now only need to work 20% of their usual hours to be eligible – meaning full-time workers only need to work one day per week. In addition, for each hour not worked, employers now only need to contribute 5% of the worker’s wages, with the Government contributing 61.67% (capped at £1,541.75).
This means that more employees will be eligible for the scheme and the cost to employers will be lower.
There is good news for the self-employed too. Two more grants have been announced under the Self-Employed Income Support Scheme (SEISS). The first will cover a three-month period from November 2020 to January 2021, while the second will cover the period from February to April 2021. The first grant is a taxable grant which will be calculated based on 40% of three month’s average trading profits, will be paid in a single instalment and is capped at £3,750. The amount of the second grant will be decided in due course.
Finally, the Chancellor announced that Local Authorities are going to receive funding to support businesses which are not legally closed but which are severely impacted by current restrictions. It will be up to Local Authorities to determine eligibility for funding and how much to give each eligible business.