New furlough scheme: What is the Job Support Scheme and how does it work?

RISHI Sunak’s updated Job Support Scheme means employees could work one day a week and earn up to 73% of their wages.

The Chancellor announced yesterday, in an update to the scheme, that employees can now work for a minimum of 20% of their contracted hours part-time and still qualify for help.

The previous furlough scheme replacement announced in September meant workers could get up to two-thirds of wages paid for hours they can’t work due to coronavirus.

Employees on the scheme would have needed to have worked a minimum of 33% of their hours to be eligible, and businesses must contribute a third of wages.

Rishi Sunak hopes the Job Support Scheme will reduce the millions of job losses expected when the furlough scheme ends.

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The Chancellor announced the Job Support Scheme in the CommonsCredit: SKY NEWS

In the updated scheme, the government will pay 61.67% of employee wages while businesses will pay just 5% for hours they don’t work.

Employees will still be able to get full pay for hours they do work.

Previously, for hours not worked employers were required to pay 33%, the government would cover 33%, with workers losing out on 33% of pay.

The Chancellor announced the changes in the House of Commons yesterday.

Mr Sunak said: “I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today.

“These changes mean that our support will reach many more people and protect many more jobs.

“I know that the introduction of further restrictions has left many people worried for themselves, their families and communities.

“I hope the government’s stepped-up support can be part of the country pulling together in the coming months.”

The Chancellor announced:

Grants for self-employed workers will also double to cover 40% of previous earnings, up to £3,750, and new grants for businesses in high alert areas.

It will be the second major amendment the Chancellor has made to the JSS since is was announced last month.

The JSS will replace furlough from November 1. Here’s everything we know about it so far:

What is the Job Support Scheme for workers?

The new Job Support Scheme will be available from November 1 and run for six months.

It’s more complicated than the furlough scheme, with different levels of support depending on the businesses’ needs.

But overall, the idea is that it keeps workers in “viable” jobs even if their hours are reduced due to a drop in demand throughout colder months.

Anyone who is in employment as of September 23 can be put on the scheme – and it’s open to all small and medium-sized businesses who didn’t apply to furlough before.

The Chancellor said that the furlough scheme will not be extended beyond October 31

How will the changes to the Job Support Scheme work?

Employees must work a minimum of 20% of their contracted hours in order to qualify for the JSS. Previously this was 33%.

For hours they don’t work, they will get 66.67% of wages paid and they will lose 33% of pay.

This is made up of the government paying 66.7% of non-worked hours while employers will pay 5% of non-worked hours.

The government will pay up to a maximum of 1,541.75 per month for non-worked hours.

While employers will pay up to a maximum of £125 a month for non-worked hours.

The caps are based on a monthly salary of £3,125 a month.

It means that a full-time employee paid £1,100 per month would get £807 a month.

Employers will pay £283 while the government will pay the rest.

Who is eligible?

All employers with UK bank accounts and UK PAYE schemes can claim the grant. They don’t need to have use the furlough scheme to apply.

Large companies (with more than 250 employees) have to meet a financial impact test. It means the scheme is only available to those whose turnover has stayed the same or is lower than before Covid-19.

There is no financial impact test for SMEs or charities.

Staff on any contract are eligible, even those on zero hours or agency workers.

What about self-employed workers?

Self-employed workers will able be able to benefit from a government grant of up to £3,750 – double the support of what was on offer before.

The Treasury previously said it would cover 20% of average monthly profits, up to a total of £1,875, covering November to January next year.

But it will now increase this amount to 40%.

An additional second grant will also be available for self-employed workers to cover February 2021 to the end of April.

The government hasn’t said how much this second grant will cover.

What about pension and national insurance contributions?

Under the scheme, employers are expected to cover the cost of workers’ pension and national insurance contributions.

This is not changed following today’s announcement.

Here we explain what financial support available to you if you have to self-isolate due to coronavirus or there’s a local lockdown.

How can I apply?

It’s not yet clear how workers can apply for the extra help but if it’s anything like the furlough scheme, they won’t have to do anything.

Employees were put onto furlough by their employers, who would then pay up to 80% of their salaries.

The employers were then able to claim back the portion of wages from the government through their HMRC portal.

Before being rolled onto the scheme, employees had to give their consent.

The scheme closed to new applicants on July 4. Since then, furloughed workers were allowed to be brought back part-time.

Employers have to pay staff in full for the hours they work and the government covers a portion of the wages for the contracted hours they were furloughed for.

To be eligible for the scheme before, staff were not allowed to carry out any worker for their employer.

When will furlough end?

The furlough scheme has been wound down since July and is due to end completely on October 31.

When it first launched back in March, the government covered up to 80% of staff salaries plus their national insurance and pension contributions.

It was then up to employers whether they topped up employees’ salaries to 100%.

From August, companies were asked to pick up the tab for the national insurance and pension contributions, while from September the government subsidy dropped to 70% of wages.

The amount covered by the state will fall again from October 1 to 60% before the support is withdrawn completely at the end of the month.

The ending of the scheme is expected to spark mass redundancies as businesses look to shed overheads as they battle to survive.

Can I be made redundant if I’m on furlough?

EVEN though furlough is designed to keep workers employed, unfortunately it doesn’t protect you from being made redundant.

But it doesn’t affect your redundancy pay rights if you are let go from your job amid the coronavirus crisis.

Your employer should still carry out a fair redundancy process.

You will be entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you’ve been working somewhere for at least two years.

How much you’re entitled to depends on your age and length of service, although this is capped at 20 years. You’ll get:

Half a week’s pay for each full year you were under 22,
One week’s pay for each full year you were 22 or older, but under 41,
One and half week’s pay for each full year you were 41 or older.

Sadly, you won’t be entitled to a payout if you’ve been working for your employer for fewer than two years.

There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.

You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.

If you’re made redundant after your company has gone into administration you can claim redundancy pay via Gov.uk.

Trade unions and organisations have been urging the government to rethink plans to end the scheme to avoid a second wave of job cuts.

More than 430,000 jobs have been lost as a result of the pandemic, mainly on the high street and travel industries.