New govt Covid scheme to pay up to half of wages


LONDON: The chancellor has unveiled increased support for jobs and workers hit by Covid restrictions after growing clamour from firms in tier two areas. Rishi Sunak announced big changes to the Job Support Scheme (JSS) – set to replace furlough in November.

He told the Commons that even businesses not forced to shut were facing “profound economic uncertainty”. Under the revised scheme, employers will pay less and staff can work fewer hours before they qualify.

Chancellor Rishi Sunak

At the same time, the taxpayer subsidy has been doubled. Businesses in tier two areas, particularly in the hospitality sector, had complained that they would be better off if they were under tier three restrictions.

They argued that although they would be forced to close, they would benefit from greater government support. Instead of a minimum requirement of paying 55% of wages for a third of hours, as announced last month at the launch of the Winter Economic Plan, employers will have to pay for a minimum of 20% of usual hours worked, and 5% of hours not worked.

The government will now fund 62% of the wages for hours not worked . This more than doubles the maximum payment to £1,541.75. In the most generous case, the taxpayer will now go from funding 22% of wages to just under half.

The scheme will, as before, be open to all small businesses and larger businesses that can show an impact on revenues.

It is aimed at addressing the gap in support for businesses in tier two restrictions, such as London and Birmingham, but is not explicitly tied to that status, and is available across the UK.

English councils will be funded to give monthly grants of up to £2,100 to 150,000 hotels, restaurants and B&Bs. Devolved nations will be given the equivalent funding for other nations, under the Barnett Formula.

The generosity of the self-employment scheme has also been doubled from 20% to 40% of profits, with a maximum grant now of £3,750 a month. The changes to the JSS mean that employers are still obliged to establish whether they can continue to pay just over a fifth of usual employees for workers they wish to keep on.