HOW IT ALL WORKS Q&A

The Daily Telegraph - Business - - Coronaviru­s: Sunak’s Winter Economy Plan -

Jes­sica Beard an­swers some of the ques­tions raised by the new scheme.

Q What is the job sup­port scheme?

A It is de­signed to pre­vent em­ploy­ees from be­ing made re­dun­dant over the win­ter months as new re­stric­tions seek to curb the spread of Covid, and will sup­port peo­ple who can work but on shorter hours. With­out the scheme it was likely busi­nesses would make some of their staff re­dun­dant and keep oth­ers full time. Now they can keep em­ploy­ees on part-time, with the Govern­ment con­tribut­ing to wages along­side its £1,000 “job re­ten­tion bonus” which pays em­ploy­ers to bring peo­ple back off fur­lough.

Q How will it work?

A Em­ploy­ees must work at least a third of their nor­mal hours and be paid as nor­mal for what they work. The state and the em­ployer will then top up wages for any hours not worked and the em­ployee will have to suf­fer some loss in in­come.

Em­ploy­ees work­ing 33pc of their hours will re­ceive 77pc of their full-time pay and be able to keep their job. Some­one who nor­mally worked 40 hours per week, but now works 14 hours at £10 per hour, will get £140 for their work, plus £78 bonus from their em­ployer and £78 from the Govern­ment for a to­tal of £296. This means they are just £104 short of their usual wage for that week.

If some­one who nor­mally worked 40 hours a week on £10 per hour is asked to work 20 hours, they would re­ceive £200 for their work, a £60 sub­sidy from their em­ployer and £60 from the Govern­ment. This amounts to a to­tal pay of £320 and they would lose only 20pc of their salary.

The more hours some­one works, the smaller hit they have to take ver­sus their old in­come. The em­ployer and Govern­ment also con­trib­ute a smaller share. The Govern­ment will cap the amount it con­trib­utes at £697.92 per month. A worker will hit the cap if they work 40 hours a week at more than £16.50 an hour.

Q Am I el­i­gi­ble for the scheme?

A Any­one who was work­ing as of yes­ter­day is el­i­gi­ble. How­ever, they must work at least one third of their nor­mal con­tracted hours. Busi­nesses that have not used the fur­lough can also ac­cess the new scheme, but not all com­pa­nies will be able to ap­ply. Large com­pa­nies can ac­cess the scheme if their turnover has fallen sig­nif­i­cantly and small or medium sized busi­nesses will also have ac­cess.

Q What hap­pens to the fur­lough scheme now?

A The Job Re­ten­tion scheme, known as fur­lough, will close as planned at the end of Oc­to­ber. The Chan­cel­lor said fur­lough was a tem­po­rary fix but can­not be a long-term so­lu­tion. Mr Su­nak said it was “fun­da­men­tally wrong” to hold peo­ple in jobs that only ex­ist be­cause they are be­ing propped up by fur­lough.

Q How long will the scheme last?

A It will re­place the fur­lough sup­port pack­age from the be­gin­ning of Novem­ber and will last for six months.

Q What if I was dis­missed be­fore the an­nounce­ment?

A Any­one who was em­ployed as of yes­ter­day will be able to ap­ply for the scheme. Labour MPs have crit­i­cised the Trea­sury for mak­ing the an­nounce­ment too late for many em­ploy­ers, which will have al­ready let staff go ahead of an end to fur­lough.

‘Any­one who was work­ing as of yes­ter­day is el­i­gi­ble but they must work at least one third of their nor­mal con­tracted hours’

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