Job Support Scheme: Clarification of the maths!
The following article from Personnel Today clears up some of the confusion regarding the latest Job Support Scheme announced by the chancellor last week. The article gives some good examples which make things clearer. In short, someone working 33% of their normal hours will receive 77% of their pay.
As announcements go, it was far from the clearest. It was only when the above graphic was tweeted by HM Treasury that people properly understood. Rob Moss relays reaction from think tanks, lobby groups, employment bodies and lawyers on the Chancellor’s announcement of the Job Support Scheme.
Many took what Rishi Sunak said to the House of Commons to mean that the Job Support Scheme would enable an employee working one third of their hours to be paid for those hours by their employer and for the government to top up that pay to two thirds of their usual income. Wrong.
What Sunak actually said was that “the government, together with employers, will then increase those people’s wages covering two-thirds of the pay they have lost by reducing their working hours”.
One third is paid for the work done. Of the remaining 66% of income that would have been lost for work not done, the government and the employer has to pay two thirds. So two thirds of two thirds? Clear as mud.
So 22% of full pay is paid by the government, 22% is paid by the employer, and the employee takes the hit on the other 23% (1% extra because of all the previous rounding down). The employer pays 55% of normal pay for 33% of the work. The government pays another 22% as shown in the pie chart.