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Chancellor Cuts Job Support Scheme Employer Contributions

22nd Oct 2020
Coronavirus, HR Resources, Human Resources, Payroll

NB – This information was superseded by the Prime Minister’s announcement on Saturday 31st October 2020.

Chancellor Rishi Sunak has today (22nd October 2020) announced a further amendment to the Job Support Scheme, which is due to begin on 1 November 2020.

When originally announced, the JSS (which will come into effect on 1st November 2020) saw employers paying a third of their employees’ wages for hours not worked and required employers to be working 33% of their normal hours.

Today’s announcement reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible.

Example: if someone was being paid £587 for their unworked hours, the Government would be contributing £543 and their employer only £44.

Employers will continue to receive the £1,000 Job Retention Bonus.

No changes have been made to the JSS for those businesses legally required to close.

In recognition of the challenging times ahead, the Chancellor said he would also be increasing support through self-employed schemes and expanding business grants to support companies in high-alert level areas.

This builds on agreements reached with Local Authorities moving to Alert Level very high, with extra support for businesses, jobs and the economic recovery.

Chancellor of the Exchequer Rishi Sunak said:

“I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today. These changes mean that our support will reach many more people and protect many more jobs.

I know that the introduction of further restrictions has left many people worried for themselves, their families and communities. I hope the government’s stepped-up support can be part of the country pulling together in the coming months”.

Self-employed grant

Today’s announcement increases the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.

This is a potential further £3.1 billion of support to the self-employed through November to January alone, with a further grant to follow covering February to April.

Business Grants

The Chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas.

These grants will be available retrospectively for areas who have already been subject to restrictions, and come on top of higher levels of additional business support for Local Authorities moving into Tier 3 which, if scaled up across the country, would be worth more than £1 billion.

These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who aren’t legally required to close but have, nonetheless, been adversely affected by local restrictions.

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