The government has announced significant increases in support for businesses through its winter support schemes. The measures are more generous compared to the extensions announced earlier this month. An employer could receive over 95% of the total wage costs of their employees if they are retained until February using a combination of schemes.

The government is significantly increasing its contribution to wage costs under the Job Support Scheme - Open (JSS-Open) for qualifying businesses that remain open but cannot find sufficient work for employees. Such employers will now be able to claim for employees working as little as 20% of their normal hours. The original requirement was that employees had to be working at least 33% of their normal hours for a claim to be made. 

The employer is still required to pay the employee as normal for the hours worked. However for every hour not worked, that employee will be paid two-thirds of the usual hourly wage up to a cap. This pay for hours not worked will be funded by the employer paying 5% (capped at £125 per month, though they can top this up) and the government funding 61.67% (capped at £1,541.75 per month).
Employees will still receive full pay for hours worked and two thirds of their pay for hours not worked but much more of the pay for unworked hours will come from the government. Under the JSS as originally announced, the employer had to pay 33.33% rather than just 5% under the new arrangements. In addition, the cap on the government contribution has more than doubled from £697.92 per month to £1,541.75 per month.

This means that employees on the scheme will receive at least 73% of their wages, where their usual wages do not exceed the reference salary.

Employers using the scheme will also be able to claim the Job Retention Bonus (JRB) for each employee that meets the eligibility criteria of the JRB. This is worth £1,000 per employee. Taking JSS-Open and JRB together, an employer could receive over 95% of the total wage costs of their employees if they are retained until February.

Any household, with no children or disabilities, that is entitled to Universal Credit will see an increase in their entitlement if their earnings fall, equal to 63p per £1 of earnings lost.

The government's factsheet gives the following example of an "average" employee on the scheme: 

• Andrew normally works 5 days a week in a restaurant and earns £1,400 a month. His employer is suffering reduced business due to coronavirus. Rather than making Andrew redundant, the company puts Andrew on the Job Support Scheme working 20% of his usual hours. 
• His employer pays Andrew £280 a month for the hours he works.
• And for the time he is not working (80%), he will get 66.67% of his pay for that time, an additional £747. That is funded as follows:
  • His employer will contribute £56 (5%); and
  • The Government will give a grant worth £691 (61.67%) to Andrew’s employer to support them in keeping Andrew employed.
• As a result, Andrew's total wage package for the month is 73% of his full normal pay, equal to £1,027.
• In addition, the employer will have to continue to cover the Employer NICs and auto enrolment pension contribution on Andrew's pay.
• His employer may also be eligible for the Job Retention Bonus worth £1,000, this would cover 94.6% of the employer’s total costs for retaining Andrew on the JSS between November and January.

We expect the government to publish further guidance shortly on the JSS-Open and the new JSS-Closed scheme. We will provide updates in due course.