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The UK Government has announced some significant changes to the Job Support Scheme, which will see the government increase support through the scheme in order to protect jobs in the difficult months ahead.

Alongside a shake-up to the Job Support Scheme, which will see employers reduce the amount they have to contribute to employees’ wages for hours not worked, the government has also announced that it will be increasing support through self-employed schemes and expanding business grants to support companies in high-alert level areas.

This builds on agreements reached with Local Authorities moving to Alert Level very high, with extra support for businesses, jobs and the economic recovery.

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Chancellor of the Exchequer Rishi Sunak said: “I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today. These changes mean that our support will reach many more people and protect many more jobs.

“I know that the introduction of further restrictions has left many people worried for themselves, their families and communities. I hope the government’s stepped-up support can be part of the country pulling together in the coming months.”

Job Support Scheme (JSS)

Recognising the pressure businesses in some sectors are facing, including the mobility sector, the Job Support Scheme shake up will see employers reduce the amount they have to contribute to employees’ wages for hours not worked by around 28 percent.

Announced back in September as an alternative to when the furlough scheme finishes at the end of October, the Job Support Scheme will encourage employers to bring staff back to work by contributing directly to the wages of those working fewer hours due to lower demand.

When initially announced, the JSS would see employers pay a third of their employees’ wages for hours not worked and required employers to be working 33 percent of their normal hours.

However, recognising the difficulties that some businesses are facing, the new announcement reduces the employer contribution to those unworked hours to just five percent and reduces the minimum hours requirements to 20 percent, so those working just one day a week will be eligible.

This means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.

Mike Cherry OBE, Federation of Small Businesses National Chairman, said: “This is a welcome intervention which will help protect more jobs and small businesses, as well as self-employed traders, through the difficult winter months.

“Measures to combat Covid-19 make this a tough time for many small businesses, but we are determined to make it through. These measures will help make that happen.”

The cap for how much the government will provide through the JSS is set above median earnings for employees in August at a reference salary of £3,125 per month.

Employers will continue to receive the £1,000 Job Retention Bonus, the government adds. The Job Support Scheme Closed for businesses legally required to close remains unchanged.

Self-employed grant

In addition, the government’s announcement increases the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.

This is a potential further £3.1 billion of support to the self-employed through November to January, with a further grant to follow covering February to April.

Business Grants

Rishi Sunak has also announced approved additional funding to support cash grants of up to £2,100 per month. Although primarily aimed at the hospitality, accommodation and leisure sectors, the grants are intended to support businesses that have been adversely affected by the restrictions in high-alert level areas.

The grants could also benefit businesses in the mobility sector that aren’t legally required to close but have been adversely affected by local COVID-19 restrictions.

These grants will be available retrospectively for areas who have already been subject to restrictions and come on top of higher levels of additional business support for Local Authorities moving into Tier 3 which, if scaled up across the country, would be worth more than £1 billion.

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