Changes to Winter Coronavirus Support Schemes

No sooner had the Chancellor, Rishi Sunak, unveiled the government's winter coronavirus support schemes than he updated them. And now, following the announcement of a second national lockdown, Sunak has extended support further.

So, what has changed, and what's the latest on the key financial measures available to keep businesses and workers afloat during the lockdown and the cold months ahead?

Coronavirus Job Retention Scheme extension

The Coronavirus Job Retention Scheme (CJRS) was expected to close at the end of October 2020. It was initially extended for one month from 1 November 2020, to protect jobs during the second lockdown, but in a subsequent announcement on 5 November, the Chancellor revealed that the scheme will now run until the end of March 2021, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500 a month.

Job Support Scheme

The Job Support Scheme (JSS), designed to provide financial support to employers and employees, was supposed to replace furlough and launch on 1 November 2020.

Following the extension of the CJRS, however, the JSS has been postponed and is expected to open when the CJRS closes. As things stand, it will start in April 2021.

While we can't be sure when, or even if, this measure will be introduced, let's quickly cover the basics of the scheme to see what support for workers might look like post-CJRS…

Initially, under the JSS, the government said it would pay up to a third of an employee's hours not worked, at their "usual hourly wage", up to a cap of £697.92 per month – with the employer also contributing a third. It also said that an employee must be working at least 33% of their usual hours to qualify for the scheme.

On 22 October, however, in recognition of the progressively challenging times ahead for businesses, Sunak increased support under the scheme, announcing that:

• The minimum number of hours that employees are required to work has dropped from 33% to 20%
• The employer contribution for non-worked hours has also been reduced from a third to 5%, up to a cap of £125 per month
• The maximum amount the government will contribute to an employee's wages has been raised to 61.67% of hours not worked, capped at £1,541.75 per month
• All in all, employees will earn a minimum of at least 73% of their normal wages, where the government contribution has not been capped

There's no doubt that Sunak's changes make for a more generous scheme for employees and employers – if or when it is implemented, that is.

OK, now what's new for the self-employed?

Self-Employment Income Support Scheme

The government has also increased support under the SEISS grant extension, raising the amount of profits covered by parts three and four of the grant, which will provide help to the self-employed between November 2020 to April 2021.

Originally, the third part of the grant was equal to 20% of the individual's average monthly trading profits, and capped at £1,875.

Sunak then announced that the third part of the grant would cover 40% of the individual's average monthly trading profits, and be capped at £3,750.

In conjunction with the second lockdown, he increased the third part of the grant once more, to cover 80% of average monthly trading profits for November 2020, plus 40% of average monthly trading profits for December and January, capped at £5,160.

On 5 November, to mirror the increase in support to employers and employers through the extension of the CJRS, the third part of the SEISS grant amount was raised again. Currently, the self-employed can claim 80% of their average monthly trading profits for November 2020 to January 2021, up to a cap of £7,500.

Information on the fourth part of the grant is to follow.

Business grants

Finally, Sunak confirmed that additional funding to support cash grants for businesses, primarily in the hospitality, accommodation and leisure sector, has been approved.

Those who are required to close their doors during the winter as a result of government-imposed coronavirus restrictions in the high-alert level, may be eligible to receive cash grants of up to £3,000 per month under the Local Restrictions Support Grant.

The government has also said it will give £1.1bn to local authorities (distributed on the basis of £20 per head) to enable them to provide one-off payments to support businesses more broadly.

So, the Chancellor has certainly extended the reach of the government's winter coronavirus support schemes, for the duration of the lockdown and beyond. But it remains to be seen whether, as temperatures continue to drop, his increased support will be enough.