State aid increased as second wave of Covid takes hold

State support to be increased for businesses and employees hit by more coronavirus restrictions.

The government has made more changes to the Job Support Scheme (JSS) that comes into effect on 1 November, the day after the Coronavirus Job Retention Scheme (the furlough scheme) ends. 

In Parliament on 22 October Chancellor of the Exchequer Rishi Sunak announced increases to the support for jobs and businesses as more coronavirus restrictions are imposed in areas where infections are increasing rapidly.

Grants for the self-employed are also increased, doubling to 40% of previous earnings. That means the maximum grant is now £3,750 instead of £1,875. To receive HMRC guidance on claiming that, click here.

When originally announced, the Job Support Scheme required employees to work at least a third of normal hours. That is now reduced to 20% – one day of a five-day week .

That means somebody paid £587 for their unworked hours will receive £543 from the state and £44 from their employer.

Employers will continue to receive a £1,000 one-off Job Retention Bonus for each employee retained.

Support cash grants to businesses (mostly pubs, cafes, B&Bs, hotels and the like) go up to £2,100 a month in high-alert level areas.

The Job Support Scheme covers all Nations of the UK. The government will provide up to 61.67% of wages for hours not worked, to a maximum of £1,541.75 a month (more than doubling the maximum payment of £697.92 under the previous rules).

Someone normally taking home £1,100 for a five-day week and now working just one day a week will still take home at least £807 a month. The employer will pay £283 of that, the state the rest.

Taking JSS and JRB together, an employer could receive 95% of the total wage costs of employees retained until February.

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."

To read the government fact sheet about the Job Support Scheme, click here.