Business

Changes to Job Support Scheme 'will protect significantly more jobs over the winter'

Chancellor Rishi Sunak announcing changes to the Job Support Scheme on Thursday. Picture by Stefan Rousseau.
Ryan McAleer

THE UK Government’s decision to increase its wage support package for Covid-19 hit businesses will protect more jobs over the winter, it was claimed yesterday.

Chancellor Rishi Sunak’s announcement came as new data from HMRC showed a substantial drop in the number of furloughed workers in the north after employers were asked to start making national insurance and pension contributions on August 1.

The number of furloughed 'employments' dropped from 111,800 on July 31 to 83,200 on August 1, according to HMRC. The figure dropped to 70,500 by the end of August.

The Jobs Support Scheme (JSS) is due to replace the furlough scheme on November 1.

First announced by Chancellor Rishi Sunak last month, it originally involved employees working one-third of their regular hours, with employers contributing 55 per cent toward pay and the Government 22 per cent.

Yesterday the Chancellor announced that employees will now have to work just 20 per cent of their hours, with employers contributing just five per cent.

The pay-out for a self-employment grant, due to run from November 1, has also been increased.

The third Self-Employment Income Support Scheme (SEISS) will now be based on 40 per cent of average monthly trading profits, up from the 20 per cent announced in September.

But the payments, capped at £3,750, will be substantially lower than the first two schemes, which were based on 70-80 per cent of monthly profits.

Business leaders said changes to the JSS were a "significant improvement", but unions said "big holes" remained in the UK Government's plan.

Colin Neill of Hospitality Ulster said the changes will give employers and businesses owners some relief that they will be able to protect jobs for at least the next six months.

“There was real fear, particularly in the hospitality sector here, that the 20 per cent contribution from employers under the existing furlough scheme simply could not be found with closed businesses and zero income.

“The new scheme will allay a significant amount of anxiety in everyone across the sector and it is also good news that neither the employer not the employee need to have previously used the Coronavirus Job Retention Scheme.”

But TUC general secretary, Frances O'Grady, said: "Low-paid workers will face real hardship if they have to get by on less than 80 per cent of their wages and the support for the self-employed is still too low.”

Neil McLeese of BeyondHR.

HR expert Neil McLeese, managing director of BeyondHR, welcomed the changes.

“The government’s amendments to the JSS are to be welcomed in my view and they are likely to protect significantly more jobs until Spring 2021.

“The new arrangements will significantly reduce the financial burden on employers with the government more than doubling their contribution.”

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