A New Approach – The end of the Furlough Scheme and the beginning of the Job Support Scheme

The Chancellor, Rishi Sunak, has today confirmed that the Furlough Scheme will end on 31 October 2020, and a new ‘Job Support Scheme’ will commence on 1 November 2020. Full details of the Job Support Scheme will be published later today, but in summary the Chancellor’s statement confirms:

• the Job Support Scheme will apply:
  • for six months from 1 November 2020;
  • only to SMEs and larger businesses that can show that their revenue has decreased as a result of the Covid-19 pandemic; and
  • only to employees working a minimum of 33% of their normal working hours.
• the employer will pay for all hours that an employee actually works;
• for hours that are not worked by an employee, pursuant to their employment contract, the Government and the employer will pay a third of the employee’s wage, each, meaning that an employee will still be paid two thirds of the hours for the hours they cannot work,
• the level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month;
• the Job Support Scheme will be open to all employees, regardless of whether they previously furloughed; and
• in respect of self-employed workers, the Government will extend the Self Employment Income Support Scheme Grant (SEISS) to those individuals who are currently eligible for SEISS. A taxable grant will be made available to those individuals from November 2020 to January 2020, to cover three months’ worth of profits at 20% of average monthly profits, up to a total of £1,875. A further grant will be made available from February 2021, with details to be provided closer to the time.

Interestingly, the Chancellor also stated employers, “will not be able to make redundancy notices to those workers who are on this scheme throughout its duration”. No further details have been provided on the government website in relation to this statement but we will continue to monitor the situation and provide further updates on all aspects of the Job Support Scheme, as they become available.

If you have any questions, please contact Elliott Francis, Linky Trott, Emma Sangeelee or any member of the Furlough Advice & Support Team.

 

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