Increased Government Contributions Under Job Support Scheme Announced

On Thursday 22 October 2020 the Chancellor announced a package of further economic measures to support businesses affected by the ongoing COVID-19 pandemic.

The package announced by the Chancellor in a statement to the House of Commons includes significant changes to the short-time working Job Support Scheme (JSS), expanded grants for businesses in high-alert areas, and increased grants for the self-employed.

The announcement of increased Government contributions under the JSS comes just two weeks after an extension to the Scheme was announced and will be warmly welcomed by many employers that were facing the prospect of having to make redundancies at the end of October. 

Under the JSS, an employee will now only need to work and be paid for at least 20% of their normal hours, not 33% as originally announced. For the employee’s remaining (unworked) hours, the government will provide up to 61.67% of the employee’s normal wages, up to £1,541.75 a month (up from £697.92 as originally announced). The employer will contribute the other 5% of the unworked hours (not 33% as originally announced). These changes are being made with a view to enabling businesses to retain staff and avoid redundancies. The JSS for businesses legally required to close their premises remains unchanged. 

There has been no change to the eligibility requirement for the JSS, such that all small and medium sized businesses will be eligible. Larger businesses are only eligible if their turnover has fallen during the pandemic. Eligible employers will be able to claim under both the JSS and the Job Retention Bonus (for employees who have previously been furloughed).

The government will also increase the amounts available under the next tranche of the Self Employment Income Support Scheme (SEISS). For those currently eligible for SEISS and who continue to actively trade but face reduced demand, the initial taxable grant will now be worth 40% of average monthly trading profits, up to a total of £3,750, covering the period from November 2020 to January 2021. The level of the second grant covering February to April 2021 will be set at a later date.

In England, business grants of up to £2,100 a month will be made available for businesses in the hospitality, accommodation and leisure sectors which have not been required to close but are impacted by restrictions in high-alert areas. These grants will be available retrospectively for areas which have already been subject to restrictions. The grants will be administered and distributed by local authorities, who will determine which businesses are eligible for funding.  

In Scotland, the First Minister announced that the current temporary restriction will remain in place until 2 November 2020, by which time they will have published details of their 5 tier COVID restrictions alert system.  In the meantime, funding for business grants over this period will be increased proportionately.  The COVID-19 Restrictions Fund will now provide one-off grants of up to £4,310 to businesses required to close by the regulations in Scotland and for businesses that remain open but are directly impacted by the restrictions, the maximum hardship fund grant will increase to £2,155.  In addition, grants of £1,650 will help those businesses that are required to close to meet the 20% employer’s contribution they are required to pay under the UK Government’s CJRS.  

However, these one-off grants in Scotland are for the period until 2 November 2020 and the Scottish administration has yet to clarify and/or confirm whether it intends to mirror the monthly grant scheme introduced in England.

We will be updating our FREE COVID-19 Guidance for Employers and comprehensive FAQs document in the coming days to help employers understand the key elements of the new JSS to assist them in planning what to do when the furlough scheme comes to an end on 31 October 2020.

In the meantime, if you require any advice or support with introducing short time working via the Job Support Scheme, redundancies or any other employment matter, please contact our team of employment law specialists to get clear and purposeful advice.

Book your FREE Consultation Now or call us on 0800 612 4772 to speak to a specialist today.