A job support scheme (JSS) is at the heart of Chancellor Rishi Sunak’s new package of Covid-19 support measures, offering a fresh financial lifeline to workers and businesses as they prepare for a tough winter ahead.
Here is a look at when the scheme will start and how it will work.
– When will the scheme be introduced and how long will it last?
It will launch on November 1 and run for six months.
– Who is it for?
The scheme is aimed at protecting viable jobs in businesses which are currently facing lower demand than normal. The aim is to keep people in the workforce, even if they cannot work their usual hours.
– How will the scheme work?
The state will contribute towards the wages of employees who are working fewer hours than normal.
Employers will continue to pay staff wages for the hours they work. But for the hours not worked, the Government and the employer will each pay one third of their equivalent salary.
It means that employees who can only work on shorter hours will still be paid two-thirds of the hours for the time they cannot work.
Employees must be working at least a third (33%) of their usual hours and will receive at least 77% of their normal pay.
After three months, the Government will consider whether to increase the minimum hours threshold.
The Government contribution will be capped at £697.92 per month.
Employers will be reimbursed in arrears for the Government contribution.
– Who qualifies to take part?
Employees must be on an employer’s PAYE payroll on or before September 23 2020.
The Government has emphasised the scheme will only support jobs which are viable. The employee must not be on a redundancy notice.
Employees can cycle on and off the scheme and do not have to work the same pattern each month.
Businesses across the UK can potentially take part, even if they have not previously used the furlough scheme.
All small and medium-sized enterprises (SMEs) will be eligible. Large businesses will need to demonstrate they have been adversely affected by Covid-19.
The Government expects that large employers will not be making capital distributions such as dividends while using the scheme.
– How much will the scheme cost?
It will depend on take-up, but could potentially cost about £300 million a month for each million employees who are in the scheme.
– What has the reaction been to the new measures?
Tom Selby, senior analyst at AJ Bell, said of the JSS scheme: “While this might be less generous than the furlough scheme, it at least gives some support to employees and valuable help to businesses hit hardest by lockdown measures.”
Mubin Haq, chief executive of the Standard Life Foundation, welcomed the measures, but said many people would still lack support, adding: “We strongly urge the Chancellor to look again at the protections and ensure people do not fall through the cracks.”
Helen Barnard, director of the independent Joseph Rowntree Foundation, said that where jobs were truly not viable a “right to retrain” was needed, “so that whole areas and industries are not cut adrift amid a gathering storm”.