UK Chancellor increases financial support for businesses

Rishi Sunak

UK Chancellor Rishi Sunak has announced changes to the Job Support Scheme (JSS) – set to replace furlough in November.

The government will now pay at least 62% for hours not worked while the employer contribution has been cut from 33% to 5%. He said employees would now take home at least 73% of pay for working a new minimum 20% of hours.

The scheme is open to all UK businesses that can prove that they have been hit by the pandemic.

 

There are also additional business grants available for businesses in England with additional funding to be released by the treasury for businesses in Scotland shortly, with more details to follow.

The self-employment scheme has also been doubled from 20% to 40% of profits, with a maximum grant now of £3,750 a month.

Here are more details on the changes to the Job Support Scheme.

  • The JSS starts to operate from 1 November and covers all Nations of the UK. For every hour not worked, the employee will be paid up to two-thirds of their usual salary.
  • The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month (more than doubling the maximum payment of £697.92 under the previous rules). The cap is set above median earnings for employees in August at a reference salary of £3,125 per month.
  • Example: a typical full-time employee in the hospitality industry is paid an average of £1,100 per month. Under the Jobs Support Scheme for open businesses, they will still take home at least £807 a month. All the employer needs to pay is a total of £283 a month or just £70 a week; the government will pay the rest.
  • Employers using the scheme will also be able to claim the Job Retention Bonus (JRB) for each employee that meets the eligibility criteria of the JRB. This is worth £1,000 per employee. Taking JSS-Open and JRB together, an employer could receive over 95% of the total wage costs of their employees if they are retained until February.

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