The Job Support Scheme
With the current furlough scheme due to end on 31st October and the Country still in crisis due to Covid-19, the Government have announced a new scheme designed to protect jobs in businesses whose demand may be lower over the coming months.
What is the Job Support Scheme?
The Job Support Scheme is a new scheme that will replace the current Job Retention Scheme, which is due to end on 31st October 2020.
How long will the scheme last?
The scheme will run from 1st November to 30th April 2021. A period of 6 months 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.
Why has the scheme been announced?
The economy is opening back up but we are by no means free from the crisis. Businesses who can offer some work to their workforce but still need more time for demand to recover will be able to claim some of their employees’ wages through the scheme, ensuring that employees earn at least 77% of their normal wages.
Am I eligible?
If you are an employer with a UK bank account and a UK PAYE scheme you are eligible to claim the grant. You do not need to have used the furlough scheme previously, you just need to have employees working at least a third 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?
Your employees must have been on PAYE since 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 your employee must work at least 33% 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.
How much can I claim?
For every hour not worked, you as the employer will contribute 33% of the employees’ normal rate of pay and the Government will also contribute 33%. The Government contribution will be capped at £697.92 a month.
The grant will not cover National Insurance or pension contributions. These will remain payable by you as the employer.
You will also be responsible for paying employees 100% of their normal salary for the hours actually worked.
How can I claim?
You will be able to claim online from 1st December 2020 and on a monthly basis. As with the CJR Scheme, claims will be payable in arrears and you will still be required to pay your 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 equally 3 ways. 1) the government 2) the employer and 3) lost and unpaid.
If the employee usually earns £600 a week, £300 would be paid normally with the remaining £300 split 3 ways. £100 paid by the government, £100 paid by the employer and £100 lost and unpaid.
The total salary received by the employee would be £500.
The cost to you as the employer would be £400 plus Employers NI and pension contributions.
Further information on calculating pay can be found on the gov.uk website.
HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or incorrect.
The government will be releasing further guidance shortly and we will keep our clients updated when more information becomes available.
As always, if you need our help with this or any other HR advice then do call us on 01536 215240.