Date24 Sep 2020
The Chancellor has today announced a new Job Support Scheme to start in November. It replaces the Coronavirus Job Retention Scheme which ends on 31st October and employers do not have to have previously used the Job Retention Scheme. Under the new scheme the Government will pay part of the worker’s wages where the worker has lost hours. The scheme is to run for six months from 1st November and to be eligible employee must work a minimum of 33% of their hours. For the hours not worked the Government and the employer will each pay one-third each for the balance of hours not worked. It is therefore intended to support those people in work to allow them to continue , albeit on shorter hours, rather than lose their job.
Using a simple example, for an employee with a usual wage of £1,000 they will be paid;
This provides a total of £777 being 77% of the usual wage. The employer will remain able to separately claim the Job Retention Bonus at the end of January 2021 provided they meet the qualifying criteria for that. A further restriction is that the employer will not be able to issue redundancy notices to employees included in the Job Support Scheme. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month. Small and medium-sized businesses are eligible - larger businesses will need to show that their turnover has fallen as a consequence of the crisis.
As with earlier announcement we need to await the fine detail. However the arrangements are intended to further support the employee to a level broadly similar to the current scheme whilst bringing down the Government contribution. The employer’s financial cost will be partly offset by the availability of the Job Retention Bonus. It will be interesting to see if this is all sufficient to limit those redundancies which may otherwise have occurred. We will of course update further as more information becomes available.