Winter Support after Furlough

Winter Support after Furlough Blog Post

Winter Support after Furlough

Chancellor, Rishi Sunak unveiled his plans for the Winter Economy last month, which included a new job support scheme in place for 6 months from November.

As winter approaches and so does the likelihood of further Coronavirus cases within the UK, there has been concern surrounding what, if any, financial support will be available once the furlough scheme comes to an end this month. Once this ends on October 31st, the new scheme will come into effect and will last through the upcoming long and potentially challenging winter months.

The new scheme which will begin on 1st November will require employees to work at least 33% of their normal hours to qualify- the remaining hours which they do not work will have one third paid by both their employer and the government. Therefore, if a person works 33% of their normal hours, they will receive 77% of their usual pay, as from the hours they do not work, the government and their employer will pay one third each. For those who are self-employed, the chancellor has advised the Self Employment Income Support Scheme will be extended until April 2021.

The new scheme means that employers will be paying around and at least 55% to keep a person employed; it is hoped that employers will choose this option over redundancy. Though critics have stated that it might be better to keep one person in full time employment than two people working 33% of their normal hours each, the new scheme means that both people are kept in employment and both receiving 77% of their usual wage.

Sunak also announced that the application deadline for the Government’s Coronavirus Loan Schemes will now be moved back to 30th November, and January 2021 will see the launch of a successor loan guarantee programme. The Bounce Back Loan Scheme is set to be supplemented by a new ‘Pay as You Grow’ scheme, which will allow for loan terms to be extended from six to ten years. Both the Coronavirus Business Interruption Loan Scheme and Coronavirus Large Business Interruption Loan Scheme will also have terms extended up to a maximum of ten years if needed.

Though the winter months are expected to be the most challenging yet for many industries, the new job scheme and loan term extensions are at least a glimmer of hope for both businesses and their employees.