CoronavirusSep 24 2020

Sunak introduces wage subsidies to replace furlough scheme

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Sunak introduces wage subsidies to replace furlough scheme

Chancellor Rishi Sunak has announced a new Job Support Scheme which will partially pay part-time workers' wages from November.

Announced today as part of the government’s 'Winter Economy Plan', the Job Support Scheme will see the government contributing towards the wages of employees who are working fewer than normal hours due to decreased demand.

The scheme will be only open to employees who work at least a third of their normal hours. These hours will be paid for by their employer, while the government and the employer will each pay a third of the remaining hours not worked.

That would mean an employee working 33 per cent of their usual hours would receive 77 per cent of their normal wages. It would mean businesses pay 55 per cent of those workers' regular salaries.

The level of grant will be calculated based on employee’s usual salary, capped at £697.92 a month, and firms will not be allowed to make staff redundant while they are on the scheme.

The scheme will run for six months, starting from November, and all small and medium sized businesses are eligible to apply. Larger businesses will have to show that their turnover has fallen in order to be eligible.

Business will be eligible even if they have not previously used the furlough scheme.

According to Mr Sunak, employers retaining furloughed staff on shorter hours can claim both the Jobs Support Scheme and the Jobs Retention Bonus.

This significantly increases the incentives to bring back previously furloughed employees, he said.

The previous Coronavirus Job Retention Scheme is set to end on October 31.

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