Job Support Scheme
On 24 September 2020, the Chancellor announced that the existing Coronavirus Job Retention (furlough) Scheme will be replaced by the Job Support Scheme. The furlough scheme finishes on 31 October and the Job Support Scheme will begin on 1 November and continue until 30 April 2021.
Full details of the Job Support Scheme can be found here:
The Job Support Scheme is designed to protect viable jobs in businesses that are facing lower demand over the winter months because of coronavirus, to keep their employees employed in the business. The financial support is available to all small and medium-sized businesses, and also large businesses whose turnover is lower than before experiencing difficulties with COVID-19.
The Job Support Scheme works like this:
· Employees must be on an employer’s PAYE payroll on or before 23 September 2020.
· An employee must work at least 33% of their usual hours to be eligible for the scheme, with the cost of those working hours being met in full by the employer. The employee would then be paid two-thirds of any hours when they are laid off, with the cost of the non-working hours being met in equal shares between the employer and HMRC. This means that employees working 33% of their hours will receive at least 77% of their pay.
· Payment is based on an employee’s normal salary, with the Government contribution capped at £697.92 per month.
· Grant payments will be made in arrears, reimbursing the employer for the Government’s contribution. The grant will not cover Class 1 employer NICs or pension contributions, and these contributions will remain payable by the employer.
· Employers must agree the new short-time working arrangements with their employees, make any changes to the employment contract by agreement, and notify the employee in writing.
· An employee cannot be made redundant or put on notice while the employer is claiming the Job Support grant in respect of that employee.
The idea behind the scheme is that it will enable employers to retain workers on reduced hours, so that employees are not made redundant.
JobSupport Scheme – 9th October 2020 Update .
On 9 October 2020, Chancellor Rishi Sunak announced an extension to the Job Support Scheme in order to support businesses across the UK that are required to close their premises due to coronavirus restrictions. In these circumstances, the government will pay two thirds (or 67%) of employees’ salaries, up to a maximum of £2,100 per month. Under the scheme, employers will not be required to contribute towards wages and will only be asked to cover NICS and pension contributions. Sunak said that: “It is estimated that around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.”
The extension to the Job Support Scheme will work like this:
· Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
· Payments to businesses under the Job Support Scheme will be made in arrears, by means of a HM Revenue & Customs claims service. This will be available from early December.
· As with the original Job Support Scheme, the extension to the scheme will begin on 1 November, when the Coronavirus Job Retention (furlough) Scheme ends, and continue until 30 April 2021. There will be a review point in January.
The extension to the Job Support Scheme is in addition to the original Job Support Scheme and the £1,000 Job Retention Bonus. Under the original Job Support Scheme, employees have to work at least a third of their hours in order to be eligible. In respect of the hours not worked by the employee, the government and employer will each pay one-third of the remaining wages. This means the employee will receive at least 77% of their pay.