Initiative will replace the furlough scheme from November
CHANCELLOR Rishi Sunak has announced amendments to the upcoming Job Support Scheme, which will replace the Job Retention (furlough) Scheme from November.
Originally, the scheme required an employee to be working at least 33% of their normal hours in order to qualify. The employer would be expected to pay that wage as normal. Then, the employer would be required to pay the employee for a third of the hours they did not work, with the government paying for a further third of those hours. In total, the result would amount to two-thirds of the employee’s total salary.
Under the changes announced today (October 22), an employee will now only have to be working 20% of their normal hours to qualify, and the employer contribution towards the unworked hours will drop to 5%. The UK Government will top up the rest, again totalling two-thirds of the employee’s salary.
Sunak had previously announced that, where a company is required to close by government, the Job Support Scheme will cover the full two-thirds of employee wages.
Speaking in the House of Commons Sunak said the changes to the scheme were designed to reflect the difficulties experienced by businesses which are open but suffering reduced trading.
“For businesses who can open it is now clear the impact of restrictions on them, particularly in the hospitality sector, is more significant than they had hoped,” said Sunak.
“So I am making two changes to the short-time work scheme to make it easier for those businesses to keep staff on rather than make them redundant.
“First, under the original scheme employees had to work for 33% of their normal hours. Now we will ask them to work only 20% of those hours.
“Second, the employer contribution for the hours not worked will not be 33% as originally planned, or even 20% as it is in the October furlough scheme. It will reduce to 5%.
“And the scheme will apply to eligible businesses in all alert levels. So businesses that are not closed but face higher restrictions in places like Liverpool, Lancashire, south Yorkshire and Greater Manchester as well as the devolved nations will be able to access greater support.
“These changes mean more employers can access the scheme and more jobs will be protected.”