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With the furlough scheme ending at the end of October the UK is moving to the new Job Support Scheme. The proposed scheme was significantly worse than the furlough scheme with employers facing the vast majority of costs. The Government, however, has updated the proposals which makes the scheme more advantageous than originally announced. 

The government has made the following changes to its initial proposals:

  • The minimum hours required for employees to work has dropped from 33% to 20% and
  • the employer contribution for non-worked hours has dropped from 1/3 to 5%.

The Government will pay 61.67% of hours not worked up to a cap of £1,541.75 per month, with the employer contributing 5% of non-worked hours up to a cap of £125 per month. These caps are based on a monthly reference salary of £3,125. This will ensure employees earn a minimum of at least 73% of their normal wages, where their usual wages do not exceed the reference salary. The employee will have to work a minimum of 20% of their normal hours.

 To give an example of the impact of these changes. An employee is normally paid £1200 per month (ignoring tax / NIC for simplicity):

Initial Proposal

Hours Worked

Employer Pays(Gross)

Government Pays

Employee Receives (Gross)

Percentage of Normal Pay employee receives

33%

(400+267)=667

267

934

77.8%

50%

(600+200) =800

200

1000

83.3%

75%

(900+100)=1000

100

1100

91.6%

New Proposals

Hours Worked

Employer Pays(Gross)

Government Pays

Employee Receives (Gross)

Percentage of Normal Pay employee receives

20%

(240+48)=288

592

880

73.3%

33%

(400+40)=440

493

933

77.8%

50%

(600+30) =630

370

1000

83.3%

75%

(900+15)=915

185

1100

91.6%

There is no change in the amount received by the employee, but the employer’s contribution is substantially reduced.

Further Details

Further details on the scheme can be found by clicking here.