Job Support Scheme

As the furlough scheme comes to an end, you’ll no doubt have seen that the Chancellor is introducing a new Job Support Scheme which comes into effect from 1 November 2020.

The new scheme is said by the government to be squarely aimed at supporting the wages of people in work. The focus is now on giving employers a more limited form of support so that they are encouraged to keep people in work on shorter hours, rather than make them redundant.

The workings are complex. By way of example, an employee working 33% of their normal hours would receive 77% of their normal pay, with 55% paid by the employer and 22% paid by the Government. The level of grant will be based on employees’ usual salary, capped at £697.92 per month which is far less generous than the Job Retention Scheme.

It remains to be seen how many employers, faced with huge drops in turnover, will be encouraged by this scheme to commit to paying over half an employee’s usual wages in the example above, in order to get the benefit of only a third of their usual hours.

All SME UK employers will be eligible for the Scheme but larger employers are only eligible if their turnover has fallen as a result of the Covid-19 crisis.

 

If you would like further advice tailored to your particular circumstances, please contact us.