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Changes to Job Support Scheme mean more money for workers impacted by pandemic

23/10/2020

The Chancellor of the Exchequer, Rishi Sunak, has announced changes to the Government’s Job Support Scheme, offering more support to workers whose industries have been negatively impacted by the coronavirus pandemic.

The Job Support Scheme, which is due to replace the furlough scheme as of November, has been revised in order to provide increased support to regions in England who come under Tier 2 in the Government’s tiered restrictions system.

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What is the Job Support Scheme?

The Job Support Scheme is a Government system of wage subsidies that will replace the Job Retention Scheme – more commonly known as the furlough scheme – at the end of this month.

The Job Support Scheme will see the Government contribute towards the wages of workers who are working less hours than they normally would due to the pandemic.

Under the Job Support Scheme, the Government and employers will each pay a portion of the hours an individual has been unable to work due to the pandemic, so long as that individual works the minimum number of hours required to qualify for the scheme.

Why are changes being made to the Job Support Scheme?

England has been placed into a tiered system of coronavirus restrictions, where the severity of the restrictions depend on which tier each geographical region has been placed in.

For regions in Tier 3, the highest tier, the restrictions amount to a semi-lockdown, with many businesses, particularly in the hospitality industry, being forced to close.

Because of the severe restrictions, the Job Support Scheme is paying 67% of an employees’ wages in Tier 3 areas if their place of work has been forced to close. This has led to unrest among businesses in Tier 2 regions, where hospitality venues are allowed to open but are experiencing a huge drop in demand.

As these businesses can stay open, employers are having to pay their staff more than employers in Tier 3 regions, without the same level of support – which they say is the worst of both worlds.

The changes to the Job Support Scheme are meant to address this problem, by offering more financial support to businesses in Tier 2.

What are the changes being made to the Job Support Scheme?

At their simplest, the new changes to the Job Support Scheme mean employers will pay less towards the scheme, and workers themselves will have to work fewer hours in order to qualify for financial support.

Under the previous scheme, an employee would have to work 33% of their regular hours in order to have 33% of the hours not worked funded by the Government, and another 33% of the hours not worked funded by their employer.

The new version of the Job Support Scheme will see employees only having to work 20% of their normal hours in order to receive support. The employer will pay them as normal for any hours they do work, and the employee will receive two thirds (66.67%) of their pay for the hours they have been unable to work.

The 66.67% received for hours worked will be made up of contributions from both the Government and the employer, with contributions of 61.67% and 5% respectively.

Are the changes to the Job Support Scheme specific to England?

While the Job Support Scheme is a UK-wide initiative, the tiered system is only currently in place in England, meaning the changes to the scheme only apply to England at the minute.

England is already under a three-tier system, however Scotland – currently in a form of ‘circuit breaker’ lockdown – will be introducing a five-tier system of virus alert levels as of November 2nd.

There will be some overlap between the tiers in Scotland and England, with the middle three tiers in Scotland’s system said to be similar to those further south. This means there is scope for the changes in the Job Support Scheme to be applicable in Scotland.

Wales is on the verge of a full national lockdown lasting a fortnight, which will begin on Friday October 23rd, while Northern Ireland began a month-long lockdown on October 16th.

Whether the new changes to the Job Support Scheme can be applied directly to the devolved nations or not, each of the devolved Governments has promised extra support that can be awarded at local level.

How do I get extra help with my finances during the pandemic?

We’re all living under a lot of uncertainty right now. The virus, and the restrictions it places on our lives, are changing by the week.

If you have had to adapt your working life due to the pandemic, had your hours cut due to a lack of demand, or lost your job entirely, you may find yourself in an uncomfortable situation – your income has disappeared, but your bills haven’t gone anywhere.

If you’re struggling with your finances right now, you’re not alone. We at Creditfix talk to hundreds of people every day whose lives have been turned upside down.

Creditfix offers them support, advice, and practical solutions to their money problems. We can help you too. Give one of our expert advisers a call today on 0808 253 2562, and we can help you take that all-important first step.

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