Government contribution towards wage bills under Job Support Scheme set to increase

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In response to the extension of Tier 2 and Tier 3 lockdown restrictions to a greater number of regions, the Government has announced that it will increase its contribution to employers’ wage costs under the Job Support Scheme (JSS), which replaces the furlough scheme on 1 November. Employers will now be expected to pay only 5% of the cost of unworked hours instead of the 33% originally announced.

In a further significant change to the plans originally unveiled last month, the minimum threshold of normal hours worked by an employee in order for their employer to claim for JSS support for them has been dropped to 20% from 33%. In effect, this means that full-time employees working just one day per week will be eligible under the scheme.

The Job Support Scheme opens on 1 November 2020 for a six-month period. The intention of the scheme is to allow employers to retain staff who have seen their hours cut due to the lockdown. Employers will continue to receive the £1,000 Job Retention Bonus and the financial provision for businesses legally required to close remains unchanged.

Business grants will be expanded to cover businesses in particularly affected sectors in high-alert level areas, whilst grants for the self-employed have been doubled to 40% of previous earnings.