Old Mill Updates

COVID-19: More change to job support schemes

Only two weeks on from announcing the Job Support Scheme (JSS) to replace Flexible Furlough from 1 November onwards, the Chancellor has announced another scheme to ‘do whatever is necessary to protect jobs and livelihoods‘.

9th October 2020

The previously announced JSS will go ahead as planned.  This new scheme, which will run for six months, is a targeted measure aimed specifically at businesses who may be legally required to close their premises due to either local or national restrictions being imposed.

For businesses affected, the government will pay two-thirds of the employees’ salaries, up to £2,100 per month.  Unlike the previous version of furlough and the JSS, employers aren’t required to contribute except to cover employer National Insurance Contributions and auto-enrolment pension contributions.  This new scheme is thereby more favourable to businesses but less generous to the employees.

To be eligible, businesses must be subject to restrictions and the employees must have been included on a payroll RTI submission on or before 23 September and be off work for at least seven consecutive days.

As with the other schemes, business needs to make the payments and then claim the grant back from the government, payable monthly in arrears which means the cash flow burden initially sits with the business.

Alongside the measures to protect jobs, grants to protect livelihoods will be extended, with businesses that are closed by national or local lockdowns being eligible for grants based on their rateable value: £1,300 per month if less than £15,000 rateable value; £2,000 per month if rateable at between £15,000 and £51,000; and £3,000 per month for larger.

The introduction of a fourth different payroll and grant scheme in a little over six months will hardly be welcomed by those who have to process payrolls and get their heads around the claim system, but this measure will be good news for affected businesses and their employees facing very uncertain times.

It quickly became clear that the JSS, with its requirement for one-third hours being worked wasn’t going to be of any help to businesses who were closed.  Whilst that was affecting some specific areas of the economy, the potential for the re-introduction of wider restrictions over the winter months has seemingly prompted the Chancellor to put in place these additional measures.

Rishi Sunak does appear to be understanding and responding to the needs of different parts of the economy and businesses in varying local situations.  It’s encouraging to see these protective measures announced in readiness but the very fact that he is making ready for wide-spread enforced closures is a warning to us all that the winter months could be very dark indeed for some parts of the economy.

Unfortunately, many businesses will still be severely impacted by potential lockdowns but not supported by these measures, particularly suppliers to closed business who will indirectly lose their revenue but may not be eligible for the enhanced support as the restrictions have not forced their closure.

For further information on the latest announcement click here.