As the new coronavirus Job Support Scheme replaces the existing furlough scheme on Sunday, new analysis has revealed that some workers will benefit from the programme while others will lose out.
According to data from financial services company Quilter (QLT.L), formerly known as Old Mutual Wealth Management, some employees can more than double their furlough income on the new scheme, especially those who work more hours and have higher salaries.
However, others may return to work part-time and will suffer a pay decrease - particularly those on lower salaries working less than 40% of their normal hours.
Some workers could substantially increase their income if they were previously furloughed on 80% of pay. For example, someone earning £70,000 ($54,000) returning to work three days a week (60% of normal hours) will receive £5,055.63 under the JSS, more than double the furlough limit of £2,500.
Anyone working at least 40% of their normal hours will get the same or more than they were eligible for under furlough.
Those working just 20% of normal hours will receive less than they were eligible for under furlough, unless their normal annual salary exceeds £50,000 per year.
Workers earning an annual salary in excess of £50,000 are better off under JSS than furlough, even if they only work the minimum 20% of normal hours.
Ian Browne, Quilter retirement planning expert, says: “Employers are the big winners from the revised scheme. They can bring staff back into work, even for just one day a week, and only have to subsidise 5% of the unworked hours. Previously, they were looking at paying someone a full day of unpaid hours if an employee returned to work two days a week.
“The government will now pick up a much bigger share of the tab, so it is a real pivot toward placing the burden on the taxpayer, rather than on firms. If you are a business owner looking at putting staff on reduced hours, this is a big boost.
“For staff returning from furlough some people will see their income drop even though they are returning to work. This will probably feel odd for some people. Where they were receiving 80% of income under furlough, some people will now return to work part time and receive a lower share of normal pay.”
Quilter, which is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index, added that there are a number of key financial planning tips for employees working part time hours under the new scheme.
It has advised that workers speak to lenders if they are unable to meet debt repayments, ask employers for top-ups, and ask if you are eligible for additional support.
Quilter said that some people will be eligible for additional support if they’re on low incomes and have limited or no savings to help them manage. Agencies such as the Citizens Advice Bureau are available to help workers.
Watch: What is the Job Support Scheme and how has it changed?