The chancellor has announced changes to the Job Support Scheme that will see employers pay less and allow staff to work fewer hours to qualify.
Rishi Sunak’s revised scheme includes a doubling of the taxpayer subsidy and is aimed at helping struggling firms that have not been made to shut.
The Job Support Scheme (JSS) is set to replace furlough in November and travel companies have largely criticised the scheme as not addressing the needs of the sector.
Under the changes, employers will have to pay for a minimum of 20% of usual hours worked, and 5% of hours not worked instead of a minimum requirement of paying 55% of wages for a third of hours, announced last month.
The government will now fund 62% of wages for hours not worked. This more than doubles the maximum monthly payment to £1,541.75. In the most generous case, the taxpayer will now go from funding 22% of wages to just under half.
Job Support Scheme Open will protect jobs in businesses facing lower demand due to Covid-19
– Government pays at least 62% for hours not worked
– Employer contribution cut from 33% to 5%
– Employees take home at least 73% of pay for working 20% of hours pic.twitter.com/X0MrQdNANz— HM Treasury (@hmtreasury) October 22, 2020
Changes mean employers are still obliged to establish whether they can continue to pay just over a fifth of usual salaries for workers they wish to keep on.
The scheme continues to be open to all small businesses and larger businesses that can show an impact on revenues.
It is aimed at addressing the gap in support for businesses in tier two restrictions, which include London and Birmingham, but is not explicitly tied to that status as it is available across the UK.
Announcing the changes, 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 also announced specific help for hospitality and leisure businesses in tier two areas.
English councils will be funded to give monthly grants of up to £2,100 to 150,000 hotels, restaurants and B&Bs. Devolved nations will be given the equivalent funding for other nations.
The government also doubled the support for self-employed people, now offering 40% of profits (capped at £3,750) as a grant, up from 20%.
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