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Self-employed grant to double as Job Support Scheme revamped

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Written by: Paloma Kubiak
23/10/2020
As the cases of coronavirus rise, so too has the necessity for further government support to protect jobs and income
Self-employed grant to double as Job Support Scheme revamped

Self-employed workers affected by coronavirus could receive up to £3,750 in the next tranche of grants, double the amount previously announced by the government.

As part of the government’s ‘Plan for Jobs’, the chancellor announced an “increase in the generosity and reach of its winter support scheme” to support livelihoods in the “difficult months to come”.For the self-employed, eligible applicants will receive a maximum of £3,750 in the next round of support offered by the government.Under the initial extension to the Self-employment Income Support Scheme (SEISS), chancellor Rishi Sunak said the lump sum will cover three months’ worth of profits from November to January up to a total of £1,875.

But today’s announcement essentially doubles the amount of profits which will be covered under the scheme, from 20 per cent to 40 per cent.

Sunak said this is a potential further £3.1bn of support to the self-employed through November to January alone, with a further grant to follow covering February to April.

The subsequent grants will only be available to those who have previously made use of the scheme. Therefore this also means that the three million or so excluded workers will still not receive financial support from the government.

Statistics published today by HMRC revealed that by 30 September, 2.3 million or two-thirds of the potentially eligible population had claimed a second SEISS grant with the value of these claims totalling £5.7bn. The average value per claim was £2,500.

Job Support Scheme

The Job Support Scheme comes into effect on 1 November as the furlough scheme is wound down and means that for every hour not worked in areas under restrictions due to coronavirus, an employee would be paid up to two-thirds of their usual salary. Previously it was confirmed that employers would pay a third of their employees’ wages for hours not worked.

But today, Sunak announced that the employer contribution will be reduced to five per cent of unworked hours, and reduces the minimum hours requirement to 20 per cent.

This means for those working one day a week, they will be eligible. If someone was being paid £587 for their unworked hours, the government will contribute £543 and an employer just £44.

He added that the government will provide up to 61.67 per cent of wages for hours not worked, up to £1,541.75 per month – more than doubling the maximum payment of £697.92 under previous rules.

The cap is set above median earnings for employees in August at a reference salary of £3,125 per month.

Figures released today from HMRC revealed the number of people furloughed has fallen from 5.1 million on 31 July to 3.3 million on 31 August.

Business grants

The chancellor has also announced additional funding of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sectors impacted by the restrictions in Tier 3 areas.

These grants will be available retrospectively for areas that have already been subject to restrictions.

The government said the grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more which aren’t legally required to close but have been adversely affected by local restrictions nonetheless.

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.”

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