Update on Government Job Support Scheme26th September 2020
On 24th September 2020, the Government revealed their ongoing plans to support businesses and employees once the Furlough Scheme ends on 31st October 2020.
The Government are introducing a new scheme through which they will help top-up the wages of employees whose jobs are currently being worked at reduced hours due to Covid-19. To benefit from the scheme, the business must be of a small or medium size, employees must be people working at least a third of their normal hours and must be employed in a “viable job”. Larger businesses will be eligible if their turnover has fallen during the crisis however, they will have to meet a financial assessment test.
There has been much criticism and concern at this latest announcement of the support scheme as many industries may lose out if the jobs do not fall within the viable category.
What is a viable job?
Unfortunately this remains unclear. There is a fear that those employed in venues that are currently closed, such as nightclubs won’t be considered as viable and may therefore lose out. The BBC’s reporter Laura Kuenssberg attempted to get some clarification from the Chancellor Rishi Sunak by asking him to clarify what a ‘viable job’ is.
She asked: “You have admitted that many people are very worried at the moment, how many jobs do you think this scheme can save with all the measures you have outlined?” She added, “And you say you only want to help and support jobs that are viable. Can you outline which jobs you believe will no longer be viable because of the pandemic?”
Mr Sunak’s response did not bring much clarification, he advised “It’s “not up to him” to say what jobs are viable or not, however, he said the government need to inject their support into the places that will make “a real difference”.
Mr Sunak added: “I believe it is right thing to do to concentrate and support jobs that have a genuine prospect of being viable and therefore, being able to provide long-term security for those employees.
“The way we can do that is through the test, where employees have to be working a minimum amount of time which was not a feature of the furlough scheme where people could be at home the entire time.
“That’s a change in this scheme and that’s the way to think about viability.”
What are the basics for the new scheme?
You can find published Government guidelines for the new scheme here. They summarise the scheme as follows:
“The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce. The scheme will open on 1 November 2020 and run for 6 months.
A company will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
The Government will pay a third of hours worked, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, with the Government contribution being capped at £697.92 per month.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.”
We will be keeping abreast of changes and Government clarification as it arises. For more detailed, practical advice on the scheme and other funding you may be eligible for, please call our Business and Employment Support hotline on 01392 424242 or email today.