Job Support Scheme
What is it?
The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce.
The company will continue to pay its employee for time worked, but the Government will pay a third of hours not worked up to a cap, with the employer also contributing a third.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
The scheme will open on 1 November 2020 and run for 6 months, until April 2021.
Employers must have a UK bank account and UK PAYE scheme.
Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.
Large businesses will have to meet a financial assessment test to prove their turnover has reduced due to Covid-19, but there will be no test for small & medium enterprises (SME’s)
Large employers using the scheme should not make capital distributions, such as dividend payments or share buybacks.
Employees must be on the employee’s PAYE payroll on or before 23 September 2020 and an RTI submission made by this date.
For the first three months of the scheme the employee must work at least 33% of their usual hours. After 3 months, the Government will consider whether to increase this minimum hours threshold
What Does the Grant Cover?
For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee. The Government contribution will be capped at £697.92 a 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, although these contributions will remain payable by the employer.
“Usual wages” calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme. Full details will be set out in guidance shortly. Employees who have previously been furloughed, will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough.
Employers must pay employees their contracted wages for hours worked, and the Government and employer contributions for hours not worked. The expectation is that employers cannot top up their employees’ wages above the two-thirds contribution to hours not worked at their own expense.
How to Claim
The scheme will be open from 1 November 2020 to the end of April 2021.
Employers will be able to make a claim online through Gov.uk from December 2020. They will be paid on a monthly basis in arrears.
HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred.
Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.
Beth normally works 5 days a week and earns £350 a week. Her company is suffering reduced sales due to coronavirus.
Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).
Her employer pays Beth £140 for the days she works (£350 x 2/5)
For the time she is not working (£350 x 3/5 = £210), she will also earn 2/3 of this amount i.e. £140, bringing her total earnings to £280, 80% of her normal wage.
The Government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of her normal wages) to Beth’s employer to support them in keeping Beth’s job.
For full current Government Guidance, please see https://www.gov.uk/government/publications/job-support-scheme
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