Government announces new in-work Job Support Scheme to support businesses and workers affected by COVID-19 through the winter months

New scheme to be introduced from November 2020 alongside extension of the Self Employment Income Support Scheme to April 2021

The government has announced a new in-work Job Support Scheme to support businesses and workers affected by COVID-19 through the winter months.

Presenting the government's Winter Economy Plan in the Commons earlier today, the Chancellor Rishi Sunak said that -

'Our economy is now likely to undergo a more permanent adjustment. The sources of our economic growth and the kinds of jobs we create will adapt and evolve to the new normal.

And our plan needs to adapt and evolve in response. Above all, we need to face up to the trade offs and hard choices coronavirus presents and there has been no harder choice than to end the furlough scheme.

The furlough was the right policy at the time we introduced it, it provided immediate short-term protection for millions of jobs through a period of acute crisis.

But as the economy re-opens it is fundamentally wrong to hold people in jobs that only exist inside the furlough.'

As a result, resisting calls for the extension of the Coronavirus Job Retention Scheme, the Chancellor announced that from 1 November 2020, for the next six months, a new Job Support Scheme will be introduced to protect viable jobs in businesses that are facing lower demand due to COVID-19.

To be eligible for the new scheme, employees must work a minimum of 33 per cent of their normal hours, and not be on a redundancy notice. Employers will continue to pay the wages of staff for the hours they work, but in respect of hours not worked the government and the employer will each pay one-third of the person's equivalent salary (and so employees working 33 per cent of their hours will receive 77 per cent of their pay). The level of the government grant, calculated based on the employee’s usual salary, will be capped at £697.92 per month.

In addition, the Chancellor confirmed that -

• the new scheme will be open to employers across the United Kingdom, even if they have not previously used the furlough scheme;
• support will be targeted at firms who need it the most, with all small and medium-sized businesses eligible, but larger businesses only when their turnover has fallen through the period of the crisis; and
• employers retaining furloughed staff on shorter hours can claim help from the Job Support Scheme and the Job Retention Bonus.

In relation to the self-employed, the Chancellor also announced that the Self Employment Income Support Scheme will be extended until 30 April 2021, to support viable traders who are facing reduced demand over the winter months. An initial taxable lump sum will cover three months’ worth of profits for the period from November to the end of January 2021, worth 20 per cent of average monthly profits up to a total of £1,875, and a second grant (the level of which will be set in 'due course' and may be adjusted to respond to changing circumstances) will be available to cover the period from February 2021 to the end of April 2021.

For more information, see Chancellor outlines Winter Economy Plan from gov.uk