Rishi Sunak reveals ‘more generous’ Job Support Scheme

furlough extended
By Alan Gregory | 22nd October 2020 | 14 min read

Chancellor also doubles support for Self-Employed Grant as COVID lockdowns escalate

The Chancellor today revealed changes to make the new Job Support Scheme and the self-employed “more generous”.

Rishi Sunak unveiled the JSS only a few weeks ago, and it is not set to start until 1 November.

Why is Rishi Sunak changing The Job Support Scheme already?

The Government has come under huge pressure from businesses to provide greater support since he announced the JSS, as the new three tier lockdown system came into effect this month.

Mr Sunak said he had been motivated to take further action after speaking to business leaders, who say the impact of escalating restrictions is worse than hoped, creating “profound economic harm” to their industries.

How is The Job Support Scheme changing?

Employers were originally asked to make a contribution to the JSS of 33% but this is being cut to 5%, Mr Sunak told MPs. Employees would have had to work 33% of their hours to be eligible under the initial announcement, but this will be reduced to 20%.

Broken down, according to the Treasury, this also means:

  • Government will pay at least 62% for hours not worked
  • Employees take home at least 73% of pay for working 20% of hours

Eligible businesses everywhere, no matter what alert level their location is in, shall be able to access this support.

The changes affect the JSS for businesses that remain open. The second part of the scheme, for organisations forced to close by law, remains unchanged, the Treasury said.

For these firms who have to shut, the Government pays 67% of employees’ wages and employers pay nothing towards wages.

How is the Self-Employed Grant changing?

These grants are to be doubled from 20% of average earnings to 40%, up to a maximum of £3,750 (up from £1,875).

Grants will be paid in two lump sum instalments, each covering three months, starting in November.

What other support was revealed for businesses?

  • A new grant scheme for businesses in tier two, even if they are not legally closed.
  • Local councils will be given the funding and they will decide who to award the direct cash grants to
  • Accommodation, hospitality and leisure businesses will be able to get up to £2,100 for every month tier 2 restrictions apply. That is equivalent to 70% of the value of the grants for closed businesses in tier 3
  • These grants will be retrospective. They can cover any business affected by enhanced restrictions since August.

When does the Job Support Scheme begin?

Seen as a successor to furlough, which ends this month, the JSS is designed to minimise the number of job cuts firms decide to make. It begins on 1 November. Mr Sunak claimed it was one of the most generous short term work schemes in the whole world.

What help is on offer?

There is a lot for firms to digest ahead of the JSS going live. The good news is IRIS has launched a Job Support Scheme calculator to help firms get to grips.

With the increasing complexity JSS brings for payroll, it could be time to consider outsourcing. If your firm is considering this option, request a no obligation quote from IRIS Managed Payroll.

If you need support or advice to help you handle people issues within your organisation, we are offering an HR Consultancy service. Find out more.