The Jobs Guarantee scheme will pay the wages of young people on health benefits who take a guaranteed job, from April 2027. The government will cover 100% of wage costs for up to 25 hours a week, for six months. For a small employer, that makes a new hire cheaper at the start. It also raises a question: what happens in month seven?
01What was announced and when it starts
The Department for Work and Pensions announced the expansion on 27 September.
The Jobs Guarantee launched earlier this year for young people aged 18 to 24 who have claimed Universal Credit for 18 months. From April 2027 it will also cover young people on health benefits. They will be offered a guaranteed job, on a voluntary basis, from week 13 after their Work Capability Assessment.
According to the DWP, the government will cover 100% of wage costs for up to 25 hours a week for six months. Employers will also get support with onboarding costs.
The same announcement restates £3,000 payments for businesses that hire a young person who has been out of work for six months. These are part of £2.5 billion committed over three years to Youth Guarantee schemes.
02What the announcement does not say yet
There is no detail yet on which employers can take part, how to sign up, or whether any sectors are excluded. So there is nothing to apply for today.
Wait for the employer guidance before you plan a hire around it.
03The month-seven cash plan
A subsidised hire still costs money. Training, equipment and any hours over 25 a week are yours to pay for. When the six months end, the full wage is yours too.
So plan the role as if it will last. Ask three questions before you hire:
- Can the business pay the full wage from month seven?
- What will training and equipment cost up front?
- Will the new role bring in enough extra work to pay for itself?
If the answer depends on growth, the funding may need to come first. Apprentice training for under-25s is already paid for in full, as our Growth and Skills Levy guide explains.
For equipment, a fit-out or working capital around a new role, compare your options for growth finance before the subsidy ends rather than after.
