January 29, 2023

Rishi Sunak’s winter plan – here’s how it will affect you

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Photograph: Alamy Stock Photo

The chancellor unveiled a winter plan on Thursday which included schemes to protect what he referred to as “viable jobs” over the next six months. These include a job support scheme to replace furlough and an extension of help for some self-employed workers.

© Photograph: Alamy Stock Photo
For every hour you would usually be employed but are off, the UK government will pay a third of your pay, which your employer will match.

What is the job support scheme?

From 1 November, the furlough scheme will end and the job support scheme will come into effect. From that date if your employer only wants you in part-time you can get paid for some of the time you would normally be working but aren’t currently needed.

Related: What is Rishi Sunak’s job support scheme and how will it work?

For every hour you would usually be employed but are off, the government will pay a third of your pay, which your employer will match.

This means that instead of losing a whole hour’s pay for every hour you are not employed, you will lose a third. The minimum anyone put on the scheme will earn is 78% of their normal pay.

Even if you have not been on furlough your employer can use the scheme. If you have been on furlough, the calculations use your usual pay and hours, not your furlough pay.

What if I’m on a zero-hours contract?

You can still qualify. The government has not said what the calculations will be based on, but for the furlough scheme it used a month’s pay from early 2019.

How much will I be paid?

To qualify for the scheme you must work at least a third of your normal hours but you can work more. The minimum may increase later – the government has said it will review it in three months.

For the hours you are working you will be paid your normal wage. When you are not working, you will be paid up to two-thirds of your normal wage – there is a cap of £697.92 a month on the government’s contribution, which means anyone earning up to around £38,000 a year will qualify for two-thirds of their missing wages.

If you are asked to work just 33% of your typical hours, the scheme will boost your wages to 78% of your normal pay. The more hours you work, the more you are paid, so if you work 70% of your normal hours you will get 90% of your pay.

For someone earning £2,500 a month, or £30,000 a year, asked to work three days out of five, or 60% of their usual hours, the scheme would give them £2,175 a month – the equivalent of £26,100 a year. Of this, £283 would come from the government.

If you are on £2,000 a month and work half of your normal hours, you will earn £1,660 of which £330 is paid by the Treasury.

How do I apply?

You don’t. The scheme is run through employers – if yours signs up it will claim the money from the government and pass it on to you.

Will my employer use it?

This is up to them. It’s one of the big issues with the scheme. The Resolution Foundation thinktank says that for workers the scheme looks as generous as similar ones in other countries. And it points out that it is better than job cuts: it found a single adult homeowner earning £20,000-a-year would face an income reduction of around 19% if they worked a third of their previous hours, compared with a 70% drop if they were made redundant and moved onto universal credit.

Related: Sunak warned winter economy plan not enough to stop wave of job losses

But it warned that the scheme is costly for employers and does not incentivise them to keep staff . It will cost firms £1,500 to employ one full-time worker on £17,000, but more than £2,000 a month to employ two half-time workers on the same full-time equivalent salary.

If your employer does not expect business to bounce back next year, or does not see a need to keep trained workers, it might not opt to use the scheme.

Can I be made redundant?

No, not while your employer is claiming the grant for you. It could put you back onto your regular contract and give you notice that you will lose your job. Employers cannot use the scheme for people who they have already made redundant.

I’m self-employed – what happens to me?

The winter plan did not address any of the problems with the original scheme for the self-employed – around 1.5 million people who were newly self-employed or had limited companies at the start of the pandemic still do not qualify for help.

If you did already qualify for support, the winter plan includes an extension of the self-employment income support scheme (SEISS) grant which covered lost earnings. The amount people will get has been reduced – the first grant will cover the start of November to the end of January and cover 20% of average monthly trading profits; the level of the second grant has not yet been set.

The total of the first grant, which will be paid in a lump sum, is capped at £1,875. This is much less than the current grant available to the self-employed, which is worth 70% of profits and capped at £6,570.

Video: Sunak: Workers’ wages will be ‘topped up’ (Sky News)

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