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Latest Update Job Support Scheme

The chancellor has in the last couple of days unveiled increased support for jobs and workers hit by Covid restrictions. This has come after much criticism from firms who are now falling into the tier two restriction areas. The focus is on helping businesses keep going and to keep their staff in employment.

So, what are the changes?

There are big changes to the Job Support Scheme (JSS) which is set to replace furlough in just a week’s time, in November. In simple terms under the new scheme, employers will pay less, and staff can work fewer hours before they qualify. At the same time, the taxpayer subsidy has been doubled.

 

The details in brief

The Chancellor has announced this week that he is reducing the minimum hours requirement to 20% and reducing the employer contribution to unworked hours to just 5%, in an announcement to Parliament today.

The new Job Support Scheme starts to operate from 1 November and will run for six months, until April 2021, with a review in January 2021.  For every hour not worked, the employee is paid up to two-thirds of their usual salary.

With the COVID-19 pandemic showing little sign of coming to an end anytime soon, it’s important for employers to ensure they are providing more support to their workforce. Read our blog to learn more about providing employee benefits for your staff in 2021.

The rules under the original scheme were:

  • Employers had to give employees on the scheme paid work for at least 33 per cent of their normal hours. That has now been reduced to 20 per cent.
  • Employers had to pay (from their own resources) to the employees on the scheme, 33% of wages for hours not worked (except in Tier 3 areas).  That has now been reduced to 5%.
  • The government reimbursed 33% to employers for hours not worked.  That has now been increased up to a maximum of 67%.

The cap on the government contribution is also raised to £1541.75 per month (from £697.92 announced on 24 September). The government press release gives an 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.

As announced on 9 October the government will pay the full 67% of wages for businesses legally required to shut (notably in Tier 3 areas), where there is no requirement for employers to contribute and no requirement to give employees on the scheme paid work.

The scheme will, as before, 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, such as London and Birmingham, but is not explicitly tied to that status, and is available across the UK.

 

For more details

Further details of the scheme, in particular the criteria for eligibility, especially for larger employers are available from the following site:  https://www.gov.uk/government/publications/the-job-support-scheme/the-job-support-scheme