New Job Support Scheme to Replace Furlough
The Chancellor Rishi Sunak has announced the new Job Support Scheme will replace the current Furlough Scheme when it comes to an end on the 31st October 2020. Starting on the 1st November 2020, the new scheme will help to protect people’s jobs during the winter months and is part of a wider “winter economy plan”. The Government and businesses will continue to top up the wages of those employees whose working hours have been impacted by the Coronavirus pandemic.
Changes to the Furlough Scheme in October
Back in March at the start of the pandemic, the Government announced a series of schemes to help protect people’s incomes if they were unable to work or their employer couldn’t afford to pay them due to the lockdown restrictions.
The furlough scheme, also known as the Coronavirus Job Retention Scheme, covered 80% of an employee’s salary up to a total of £2,500 a month and the employer could top up the extra 20% of their salary.
Over the past few months, the Government has been winding down the scheme, by reducing their contribution and ordering businesses to start paying national insurance and pension contributions for their employees.
From 1st October the scheme changes and the government will reduce their contribution again, then when the scheme ends on 31st October the new Job Support Scheme will take over.
How will the Job Support Scheme work?
According to official figures, there are nearly 3 million workers (12% of the UK’s workforce) on partial or full-time furlough. The Job Support Scheme is designed to help employees who are working less hours due to lower demand than normal.
Employees who are working for at least one third of their normal hours are eligible for the new scheme. The government and employer will each pay one-third of the remaining hours.
Paul Scholey, our Senior Partner commented on the Job Support Scheme, saying – “The furlough scheme has been at least partially effective in preventing large scale redundancies. Our concern is that a watered-down replacement is inevitably going to open the floodgates to just such redundancies. Of course, some companies might have gone under despite the pandemic, but working out which are “viable” looks very much like crystal ball gazing. And this is happening at a time when lockdown restrictions are extending across the country at a rate. I think there needs to be a more consistent approach – it’s no good saying stay away from work if there’s no scheme to put money in people’s pockets.”
For more information on the Job Support Scheme visit the Government website.
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