Chancellor announces new Jobs Support Scheme

Updated on 24 September 2020

Chancellor Rishi Sunak has announced a new job support scheme, starting on 1 November and lasting six months, with the aim of protecting viable jobs in businesses who are facing lower demand over the winter months due to Covid-19.

Sunak made the announcement in the House of Commons as he outlined the government’s plans for continued support for business and individuals once the coronavirus job retention scheme (CJRS) ends on 31 October.

The Chancellor said: ‘Our approach to the next phase of support must be different to that which came before.

‘The primary goal of our economic policy remains unchanged - to support people’s jobs - but the way we achieve that must evolve.’

The replacement for the furlough scheme is intended to support people who are in work, so they continue on shorter hours rather than being made redundant.

It will apply to employees working a minimum of 33% of their usual hours. For the remaining hours not worked, the government and the employer will pay one third each. This means employees working 33% of their hours will receive at least 77% of their pay.

The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.

All small and medium-sized businesses are eligible but larger businesses will need to show that their turnover has fallen through the crisis.

The new scheme will be open to employers across the UK, even if they have not previously used the furlough scheme.

Employers retaining furloughed staff on shorter hours can claim both the jobs support scheme and the jobs retention bonus.

In Summary:

  • The new Job Support Scheme replaces the ‘furlough scheme’ from 1st November 2020 to 30th April 2021
  • All small and medium-sized businesses will be eligible for the scheme
  • Large businesses will be eligible if they can prove that their turnover has fallen during the coronavirus pandemic
  • It will be open to employers across the UK even if they have not previously used the furlough scheme
  • Employees who are on payroll as of 23rd September 2020 and can work at least one third of their usual hours will be eligible
  • Employers will pay the employees for the hours worked
  • For the hours employees can’t work, the government and the employer will each cover one third of the lost pay
  • The grant will be capped at £697.92 per month
  • Employees must be in ‘viable jobs’ to benefit from the scheme. So, industries that are currently closed, for example nightclubs, may lose out
  • Employers retaining staff on shorter hours can claim both the Jobs Support Scheme and the Jobs Retention Bonus
  • Employees cannot be made redundant or put on notice while a Jobs Support Scheme grant is being claimed on their behalf

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