Kickstart and other government employment initiatives
Delivering his Summer Economic Update on 8 July, the Chancellor announced a package of measures to support jobs.
Job Retention Bonus
One of the measures announced is a Job Retention Bonus, which is being introduced to help businesses keep furloughed workers in employment, as the Coronavirus Job Retention Scheme is phased out. UK Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.
What we know so far:
- The initiative aims to encourage and incentivise employers to bring furloughed staff back to work and to keep them on.
- A one-off payment of £1,000 will be made to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021.
- The employer must have made claims for the employee under the CJRS.
- To be eligible, employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme (31 October 2020) and the end of January 2021.
- Payments will be made from February 2021.
Further detail about the scheme and how it will work will be announced by the government by the end of July.
The Chancellor also announced that a new £2 billion Kickstart Scheme will be launched to create hundreds of thousands of new, fully subsidised jobs for young people across the country aiming to give them the best possible chance of getting on and getting a job.
What we know so far:
- Young people aged 16-24, claiming Universal Credit and at risk of long-term unemployment, will be eligible.
- Funding available for each six-month job placement will cover 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top this wage up.
- The scheme will be open to young people in every region and nation of Britain.
- It will directly pay employers to create new jobs for any 16 to 24-year-old at risk of long-term unemployment.
- These will be new jobs – with the funding conditional on the firm proving these jobs are additional.
- The jobs will need to be a minimum of 25 hours per week and paid at least the National Minimum Wage.
- Employers will need to provide Kickstarters with training and support to find a permanent job.
- If employers meet these conditions, the government will pay young people’s wages for six months, plus an amount to cover overheads.
- That means, for a 24-year-old, the grant will be around £6,500.
- Employers can apply to be part of the scheme from next month, with the first Kickstarters in their new jobs this autumn.
- The scheme will run until December 2021, with an option of being extended.
More information on how the scheme will work will follow later this month.
The Chancellor also announced two other incentives, outlining that the government will pay employers £1,000 to take on trainees. Sunak also confirmed businesses that hire apprentices aged 16 to 24 will be given bonuses of £2,000 per hire as an incentive. And for businesses taking on an apprentice aged over 25, there will be a bonus of £1,500 for those employers.
However the government has indicated that young people who take part in the Kickstart scheme cannot also be apprentices. We await further news on all of the above initiatives and will update this page with further details as they emerge – watch this space.
You can read about the Chancellor’s Plan for Jobs here.
Ben White | Unsplash