The furlough scheme that allowed people to stay at home and still be paid 80% of their wages ends on 31 October. Its replacement, the Job Support Scheme (JSS), begins the next day and will last until the end of April. A different version of it will be in place for businesses forced to close or become takeaway-only by local lockdown rules.
Under the standard scheme – which was improved on 22 October – the employee works for at least a fifth of their normal hours – say 7.5 hours out of a full-time 37.5-hour week. They are paid their full rate for those hours. For the other 30 hours, they are effectively on furlough and will get two thirds of their rate of pay – the government pays almost all of that (up to a cap of £1,541.75 a month) and the employer the rest. The arithmetic means the person working one day a week instead of five gets just under three-quarters of their full pay. However, employers will be paying them nearly a quarter of their normal pay for just a fifth of the work. The employer must also pay National Insurance and minimum pension contributions on the amount the worker receives. It is hoped that employers will use this improved JSS rather than make people redundant.
Employees on the JSS cannot do any work for their employer on the days they are scheduled to be off, but they can take on other work. The employer can also claim a Job Retention Bonus of £1,000 for every person it keeps on until 31 January 2021.
A different version of the JSS applies to businesses forced to close or go takeaway-only by coronavirus restrictions imposed anywhere in the UK. Called the Job Support Scheme Expansion for Closed Business Premises, it is more like the old furlough scheme. HMRC will pay two thirds of normal pay up to £2,100 a month for workers who cannot work due to closures.
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Both schemes will be reviewed in January. To find out more, search “job support scheme” on gov.uk.
Paul Lewis presents Money Box on Radio 4