What is the Job Support Scheme and how will it work?

The Job Support Scheme replaces the furlough scheme on 1st November.

Older woman works at home on laptop

 

The Job Support Scheme will start on 1st November when the furlough scheme ends. Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.

Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the government and the employer will each pay one third of their equivalent salary. The Government calculates that it will end up paying 22% of an employee’s salary.

The Government says this means employees who can only go back to work on shorter time will be paid two thirds of the hours for those hours they can’t work.

Employees must be working at least 33% of their usual hours. The level of grant [which won’t cover Class 1 NICs or pension contributions] will be calculated based on an employee’s usual salary, capped at £697.92 per month. The Treasury says this means workers will get 77% of their usual pay.

The Job Support Scheme will be open to SME businesses across the UK even if they have not previously used the furlough scheme and to larger companies if their turnover has fallen by a third due to Covid. Employers can also claim the previously announced £1K Job Retention Bonus for employers who bring workers back from furlough.

Other factors:

– The scheme is open to employers who have not previously used furlough as well as those that have;

– Employees can’t be made redundant or given notice of redundancy during the period for which the employer is claiming the grant;

– Employers will have to have made a Real Time Information submission for any employee they claim for on or before 23 September 2020.

– Employees can jump on and off the scheme and don’t need to be working the same pattern each month, but each working arrangement needs to be for a minimum of seven days.

– Employers need to reach a written agreement with staff after consultation before their hours or wages can be reduced. Collective consultation may be required depending on the numbers affected.

Criticism

Employment experts have expressed concerns that the scheme will not make economic sense for smaller employers because they will essentially be paying workers more than the hours they work.

Experts have also argued over what the Government means by ‘unviable jobs’, given many are in sectors which were doing okay before the Covid pandemic, such as events, but have been unable to re-open since the national lockdown was lifted.

Meanwhile, although self employed people will see the Self Employment Income Support Scheme extended and various loan extensions, Mike Cherry, chairman of the Federation of Small Businesses, highlighted the continuing lack of support for some self-employed people. He said: “The Chancellor had nothing to say for those left out of the first round of support measures – not least the newly self-employed and company directors.”

The Government has also announced a new scheme this week aimed at helping those who have been out of work for three months back to work based around investment in personal work coaches.

The £238 million Job Entry Targeted Support will include specialist advice on how people can move into growing sectors, as well as CV and interview coaching, peer support and opportunities to build skills.

The scheme, which includes sector-based work programmes designed to help people move between industries, will hire an additional 13,500 work coaches. It starts in selected areas this week with more areas following later this month and Scotland early next year.



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