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Job Support Scheme & Winter Support

Job Support Scheme

 

The government recently revealed the Job Support Scheme - a follow-up to the current job retention scheme (furlough) which ends 31st October and announced a further extension to this on Friday, to now help support businesses whose premises have been legally required to close directly due to Covid-19 restrictions. 

The first focus of this scheme is to support businesses that can remain open by topping up the wages of those who are working but on reduced hours. This is open to all employers across the UK and it isn't necessary to have used the furlough scheme previously. All small and medium companies are able to use the scheme. Large companies will only be able to use the scheme if they're able to prove their turnover has fallen during the crisis.

Employees who are working and are paid for a minimum of a third of their usual hours will have their pay topped up by two-thirds of their unworked hours. The government and employer will each pay 1/3 of their unworked hours. This means that an employee who is working 33% of their usual hours will still receive 77% of their usual pay - the employer will cover 55% of the wages with the government topping up 22%. 

For example, an employee who usually works 150 hours a month at £15/hour has a usual gross wage (before tax) of £2,250. They must work and be paid for 50 hours by the employer:

 

Employer

Government

Worked Hours

1/3 of 150

50 hours

£750

£0

Unworked hours

Remaining 100

1/3 of 100

£500

1/3 of 100

£500

Total payable

£1,250

£500

The employee receives £1,750 out of their usual wage of £2,250 for working 1/3 of their usual hours 

Further eligibility details:

The second part of this scheme announced on Friday (9th Oct) is to support businesses that are legally required to close due to Covid-19. This will cover businesses that, as a result of restrictions set by one or more of the four governments of the UK, are legally required to close their premises or to provide only delivery and collection services from their premises. In these cases, the government will help pay the wages of those employees who aren't able to work. Where an employee can't work for a period of one week or more, the employer will pay them two-thirds of their normal salary up to a cap of £2,100 per month - which will be covered by the government. The employer will only have to cover the employer's national insurance and pension contributions in these cases. 

Both parts of this scheme will start from 1st November and run for 6 months, with the first grants being paid in early December in arrears. The scheme will be reviewed in January and conditions could be subject to change. 

Tags: business, Budget

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