The Chancellor today announced changes to the Job Support Scheme, with employees now only needing to work one day a week to be eligible.
The government will now pay 61.67 per cent of employee wages, while businesses will pay just 5 per cent for hours they don't work.
Mr Sunak explained: "It is clear that even businesses that can stay open are facing profound uncertainty.
"To protect jobs, we are making the Jobs Support Scheme more generous for employers.
"If businesses are legally required to close as we’ve already outlined, the government will cover the full cost of employers paying two-thirds of people’s salary where they can’t work for a week or more.
“For businesses who can open, it is now clear the impact of restrictions on them particularly in the hospitality sector is more significant than they had hoped.”
Under the previous plan employees had to work a minimum of 33 per cent of their hours to be eligible, while businesses paid a third of the wages.
Employees will also get full pay for hours they do work.
Mr Sunak also unveiled new monthly support for firms in tier two areas, which will apply to any impacted hospitality, accommodation and leisure premises.
Speaking in the Commons, Mr Sunak explained businesses could receive them retrospectively so can backdate their claim to August.
He said: "People need to know this is not forever. These are temporary restrictions to help control the spread of the virus.
"There are difficult days and weeks ahead.
"It is clear that even businesses who can stay open are facing profound economic uncertainty.
"I am introducing a new grant scheme for businesses impacted by tier two restrictions, even if they aren't legally closed.
"We will fund local authorities to provide businesses in their area with direct cash grants."
The value of grants for those who are self-employed will also be doubled.
The UK Government has already provided £7.2 billion in support due to coronavirus, but there may be further additions as a result of today’s grants.
The Liberal Democrats accused Mr Sunak of “making up plans on the hoof”.
Lib Dem Treasury spokesperson Christine Jardine said: “Yet again the Chancellor is taken by surprise by events unfolding exactly as predicted months ago. He has utterly failed to address the gravity of the economic crisis, with people and businesses facing devastating pressure across the country.
“Beyond tinkering around the edges of the Job Support Scheme and correcting some of its blatant errors, he has offered nothing for those slipping into poverty.
“We need real leadership from the government, not a patchwork of ever-changing measures.”
The SNP claimed the support for Scotland "does not go far enough".
SNP shadow Chancellor Alison Thewliss said: "Scottish people need this today, not eventually, not at some point in the future.
"We need this now and the Chancellor should give clarity today so the Scottish Government can act.
"This is nowhere near whatever it takes.”