Chancellor Rishi Sunak announced a new emergency job saving scheme on Thursday 24 September, as part of a new package of coronavirus support measures.
The Job Support Scheme is designated to protect so-called “viable jobs” in businesses which are facing lower demand over the winter months due to the coronavirus pandemic.
Mr Sunak also confirmed that the current furlough scheme will come to an end this October, with the Chancellor stating that the way to save jobs must "evolve.”
But who is eligible for the new scheme, and how will it work? Here’s everything you need to know.
Who is the scheme for?
The Job Support Scheme is aimed at keeping employees in the workforce of businesses that are currently facing lower demand than normal, even if they are unable to work their usual hours.
How will the scheme work?
The government will contribute towards the wages of employees who are working fewer hours than usual, while employers will continue to pay their staff for the hours they have worked.
For the hours employees have not worked, the cost will be split between the government and the employer, each of which will pay one third of the staff member’s equivalent salary. This means that employees who can only work on reduced hours will still receive two thirds of their salary for the time they cannot work.
Employees must be working at least a third (33 per cent) of their normal hours to be eligible and will receive a minimum of 77 per cent of their normal pay, where the Government contribution has not been capped.
The government contribution will be capped at £697.92 per month. Employers will be reimbursed in arrears for the government contribution.
After three months, the government will consider whether to increase the minimum hours threshold.
Who is eligible?
To be eligible for the scheme, employees must have been on an employer’s PAYE payroll on or before 23 September 2020. The government has stressed that the scheme will only support jobs which are “viable”, and employees must not be on a redundancy notice.
Employees can cycle on and off the scheme and do not have to work the same pattern every month.
All small and medium sized businesses are eligible to apply for the scheme, even those which did not utilise the government’s original furlough scheme.
Larger businesses can also apply, but “only when their turnover has fallen.” They will be required to demonstrate they have been adversely affected by the pandemic.
When will the scheme start?
The Job Support Scheme will launch on 1 November 2020.
It will continue to run for a period of six months, until the end of April 2021.
How do I claim?
Employers will be able to make a claim online via Gov.uk from December 2020 and will be paid on a monthly basis.
Grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.
A version of this article originally appeared on our sister title, The Yorkshire Post.