Furlough rules go through a major change from today, with the Government contribution dropping to 60%.
From Thursday, October 1, instead of the Government originally paying 80 per cent of pay - dropped to 70% last month - it will now pay 60 per cent, up to £1,875.
Employers will have to pay a minimum of 20% of wages, up to a cap of £2,500.
It is the last major change before the system is replaced at the end of the month.
Chancellor's support measures for the economy in brief
Chancellor Rishi Sunak has announced fresh measures to replace the furlough scheme and help the 海角视频 economy to continue to recover during the second wave of coronavirus infections.
Here are the changes at a glance:
– The Jobs Support Scheme (JSS), a form of wage subsidy for “viable” jobs, will replace the furlough scheme, which will be wound down next month.
– The JSS will allow staff to be paid by their employer for working at least a third of their usual hours, with the Government topping up part of their salary that would have otherwise been lost due to working reduced hours.
– The Treasury said the Government would pay a third of an employee’s equivalent salary, capped at £697.92 per month, meaning a third will go unpaid.
– All small and medium-sized businesses will be eligible for the wage support concept, which starts in November and runs for six months, but larger businesses will have to prove their profits have been hit by the pandemic.
– The current self-employed grant will be renewed on similar terms to the new Jobs Support Scheme, the Chancellor said.
– The temporary reduction of VAT rates from 20% to 5% for the hospitality and tourism sectors will be extended for a further two months, with a new deadline of March 31 2021.
– Business “bounce-back loans” will have a “pay-as-you-grow” element added, giving loanees 10 years rather than six years to repay the money, a move that will slash monthly repayments by almost half, according to the Chancellor.
– Those struggling to repay their bounce-back loans will be able to choose to make interest-only payments and “anyone in real trouble” will be permitted to suspend repayments all together for up to six months, said Mr Sunak.
– The deadline for taking out a coronavirus business interruption loan will be extended until November 30, with Mr Sunak also increasing the Government guarantee on them for up to 10 years.
The Job Retention Scheme will be ended on October 31 and replaced with a Job Support Scheme.
Under the new scheme, instead of paying up to 80 per cent of salaries for people unable to work, the government will pay up to two thirds of salaries for people working at least a third of their hours. The aim is to top up the wages of workers in “viable jobs” for six months, when they are working at least a third of their normal hours.
The change comes after the original 80 per cent system was wound down to a 70 per cent contribution from the Treasury last month.
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The Government also ordered employers to start paying National Insurance and pensions contributions for all staff.
It means that monthly earnings will be at least 80% of workers' salary with money from the Government and the employer.
It is then up to each individual employer whether they want to top up the remaining 20% to 100% of salary.
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