Chancellor Rishi Sunak reveals new Job Support Scheme

24th September 2020

Due to the ongoing COVID-19 situation, this afternoon Chancellor Rishi Sunak has revealed that a new Job Support Scheme will begin when the current furlough scheme ends.

The new scheme bears similarities to wage subsidy schemes currently used in countries such as Germany.

The Job Support Scheme will begin on 1st November 2020 and will last for six month, aiming to keep staff in their roles but on reduced hours, rather than being made redundant. The Government and employers will top up wages to cover two thirds of the pay employees are losing as a result of their reduced hours.

To be eligible for the scheme, employees must work at least 33% of their hours. For the remainder of their hours, the Government and their employer will pay 33% each.

This means that employees working at least one third of their hours will receive at least 77% of their normal wages.

The Job Support Scheme will mainly support SMEs. All employers are welcome to apply, even if they did not use the furlough scheme, however the criteria is stricter for larger businesses. They have been warned that they will only be eligible if their turnover has decreased.

The Treasury said the Job Support Scheme “will protect viable jobs in businesses who are facing lower demand over the winter months due to COVID-19.”

The  Job Support Scheme is part of a package of measures announced today, including:

  • An extension to VAT cut for the hospitality and tourism sector until the end of March
  • Extensions to application deadlines for COVID-19 loan schemes until the end of November
  • Businesses that have deferred their VAT will be able to split their payment into smaller, interest-free payments over the course of 11 months, rather than having to pay a lump sum at the end of March
  • Businesses that utilised the Bounce Back Loan Scheme will be able to take advantage of more time and flexibility for their repayments
  • An extension to the Self-Employment Income Support Scheme

Don’t forget that the furlough scheme is changing next month, when the Government support will drop to 60% of wages capped at £1,875, requiring employers to top up the remaining 20% themselves. The Job Retention Bonus Scheme follows this, by providing one-off £1,000 payments to businesses for each furloughed employee that is brought back to work.

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