Job Support Scheme Open
Recognising the financial pressures that some employers are facing to make it through the winter, the Government have announced an increase in the scale of support available to employers. The Job Support Scheme has been split into two, Job Support Scheme Open which applies to businesses that are able to remain open through the winter and the Job Support Scheme Closed which applies to businesses who are forced to close due to one or more of the four UK governments forcing them into lockdown. This guidance relates to the Job Support Scheme Open.
What is the Job Support Scheme Open?
The Job Support Scheme Open is a new scheme that is more generous than the original Job Support Scheme announced in September. It applies to businesses who can safely remain open during the winter months.
How long will the scheme last?
The scheme will run from 1st November to 30th April 2021. A period of 6 moths initially.
Who is the scheme designed for?
The scheme has been designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19 but are able to remain open in some capacity. The aim of the scheme is to help employers who can offer some work to their employees but not full time, keeping employees attached to the workforce.
Why has the scheme been changed?
Recognising the evolving situation with the pandemic and health restrictions, and the pressures employers are facing this winter, the government have announced that they will increase the scale of support available to employers through the Job Support Scheme Open in order to protect more jobs.
Am I eligible?
All employers, who are able to operate safely, with a UK bank account and UK PAYE schemes are eligible to claim under the scheme. Employers do not need to have used the furlough scheme previously, they just need to have employees working at least 20% of their normal hours.
Large business will have to meet a financial assessment test and must demonstrate a lower turnover due to the Covis-19 crisis. There will be no assessment for SMEs.
Are my employees eligible?
Employees must have been on PAYE on or before 23rd September to be eligible. As before, this means a Real Time Information (RTI) submission must have been made before this date.
For the first 3 months of the scheme the employee must work at least 20% of their normal working hours. After 3 months, the government will consider whether to increase the minimum threshold.
Employees will not be required to work the same shift pattern each month and will be able to leave and join the scheme as per the needs of the business but each short-time working arrangement must last at least 7 days.
Employees on any type of contract are eligible.
How much can I claim?
For every hour not worked, the government will contribute 61.67% and the employer will contribute 5%, amounting to two thirds of the employee’s normal pay. This will be capped at £1,541.75 a month (government contribution) and £125 a month (employer contribution).
Employee’s will receive at least 73% of their normal salary where their usual salary does not exceed the capped contributions.
The grant will not cover National Insurance or pension contributions. These will remain payable by the employer.
The employer will be responsible for paying employees 100% of their normal salary for hours worked.
How can I claim?
Employers will be able to claim online from 8th December 2020 and on a monthly basis. As with the CJR Scheme, claims will be payable in arrears and employers will still be required to pay their employees and report the payment to HMRC.
Can you give me an example of how this will be calculated?
An employee works 50% of their normal hours. This 50% would be paid at normal hourly rate.
The remaining 50% is then split 3 ways. 1) the government 2) the employer and 3) lost and unpaid.
If the employee usually earns £500 a week, £250 would be paid normally with the remaining £250 split 3 ways. £154.18 paid by the government, £12.50 paid by the employer and £83.32 lost and unpaid.
The total salary received by the employee would be £416.68
If the same employee was to work 2 out of 5 of their normal working days, this would be 40% of normal working days.
40% of their salary would be paid at normal rate which would total £200.
The remaining £300 would be split 3 ways, £185 paid by the government, £15 paid by the employer and £100 lost and unpaid.
The total salary received by the employee would be £400
Further information on calculating pay can be found on the gov.uk website.
Can I make employees redundant while using the scheme?
No, employers will not be able to make any employees redundant, or put them on notice of redundancy, while using the scheme. The employee must first be removed from the scheme.
HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or incorrect.
Employers must have agreed the temporary working arrangements for shorter hours in writing. This must be made available to HMRC upon request.