New Job Support scheme to replace furlough leave

On 24 September 2020, Chancellor Rishi Sunak announced that the existing furlough leave scheme will be replaced on 1 November by a new Job Support scheme to aid businesses during another six months of tighter coronavirus restrictions. The scheme will last for six months until 30th April 2021. Employees must work at least 33% of their usual hours to be eligible for the scheme, with the cost of those working hours being met in full by the employer. The employee would then be paid two-thirds of any hours when they are laid off, with the cost of the non-working hours being met in equal shares between the employer and HMRC.

Employers wishing to take advantage of the scheme will, in most circumstances, need to seek agreement of the employees to make temporary changes to the employment contract.

Treasury factsheet has been published which confirms:

  • The employer does not need to have claimed under the coronavirus job retention scheme (CJRS) to claim under the job support scheme
  • The employee must work at least 33% of their usual hours (but this may increase from 1 February 2021)
  • The job support scheme contribution will be capped at £697.92 a month
  • The Treasury’s expectation is that employers will not be permitted to top up their employees’ wages above the two-thirds contribution to hours not worked at their own expense
  • Large businesses (probably those with 250+ employees) will have to demonstrate that their turnover is lower now than before the pandemic (meet a financial assessment test) and the Treasury’s expectation is that they will not be making capital distributions whilst accessing the grant.