Yesterday the Chancellor Rishi Sunak has introduced the Job Support Scheme, which will come into effect from the 1st of November, when the Furlough Scheme ends.
The Job Support Scheme will run for six months, until the end of April 2021, and it will be reviewed after three months.
This new scheme will work quite differently from the previous one: it will top up salaries of employees who can’t be taken back full-time by their employers. However, in order to be eligible, the employees will need to work at least one third of their normal hours.
For the hours not worked, the government and employer will each pay one third of the remaining wages. So, assuming that an employee works 33% of the normal hours, the government will pay one third of the remaining 66% (22%) and the employer another third (22%). Therefore, employees will get at least 77% of their pay, which is almost the 80% offered under furlough scheme.
However, with furlough scheme the government paid 80% of the salaries up to £2,500 a month until August, 70% in September and 60% in October (with employers paying respectively 10% and 20% in these two months). Under the new scheme, the government will only a pay a maximum of 22% with a cap of £697.92 per month.
Furthermore, with the new scheme, employees will have to work at least a third of their hours, instead of none. After three months, the government may increase the minimum number of hours worked.
Those working in industries currently closed, such as nightclubs, won’t be able to participate to the new Job Support Scheme and they may lose their jobs.
The Job Support Scheme is open to small and medium businesses, but also large businesses may be eligible, if they can demonstrate that they have had a reduction in revenues.
Finally, in order to be eligible, employees must have been on the firm’s payroll since at least the 23rd of September.
Other measures introduced by the government in order to minimize unemployment are the following:
- £1,000 for every furloughed employee kept on until at least the end of January.
- £1,500 for every out-of-work 16-24 year-old given a ”high quality” six-month work placement.
- £2,000 for every under-25 apprentice taken on until the end of January, or £1,500 for over-25s.
For more information on the new Job Support Scheme, please contact us at info@well-tax.com or follow us on our social media.
