Today (22 October 2020), the Chancellor has announced further changes to the Job Support Scheme that will replace the current furlough scheme when it ends on 31 October.
Under the revised scheme, employers will pay less and staff can work fewer hours before they qualify, while the taxpayer subsidy has been doubled.
Originally, if an employee could work and be paid for at least 33% of their usual hours, the “pay” for the time they are not working was to be split 1/3 HM Treasury, 1/3 employer with the employee foregoing 1/3. Now, employers will only have to pay wages for a minimum of 20% of an employee’s usual hours and 5% of hours that are not worked. The Government’s contribution will increase to 62% of the wages for hours not worked. This increases the maximum payment to £1,541.75.
The changes address a gap in support for businesses who are being placed in lower tier restrictions under the Government’s new guidelines.
The Job Support Scheme gives employers the option to keep people in work on shorter hours rather than make them redundant. It is open to all employees, not just those who were previously on furlough. Large businesses will only be eligible if they can show a decrease in turnover due to the pandemic.
The scheme will run for 6 months from 1 November and is intended for jobs which will be viable at the end of that period.
We will update our readers with further guidance and legislation when published.
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