Job Support Scheme – What We Know So Far

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Chancellor of the Exchequer Rishi Sunak has laid out his Winter Economy Plan to support the UK economy into the Winter months. 

 

This will include a new Job Support Scheme which will start from 1 November 2020 following the end of the Coronavirus Job Retention Scheme on 31 October 2020.

The scheme which will run for six months until April 2021 will provide government support to help employers retain their workforce.  Where employers are not able to provide enough work for their employees, the government will contribute towards two thirds of the hours not worked. 

Employees will need to work a minimum of 33% of their usual hours. For every hour not worked the employer and the government will each pay one third of the employee’s usual pay, and the government contribution will be capped at £697.92 per month.

Who is eligible to use the scheme?

  • Employers
    • All employers with a UK bank account
    • All employers with a UK PAYE scheme
    • Small and Medium businesses will be eligible

      • Large businesses will have to meet a financial assessment test to prove their turnover has been negatively impacted by Covid-19. 
      • Large employers using the Job Support Scheme will be expected not to be
      making capital distributions, such as dividend payments or share buybacks, whilst
      using the scheme.

  • Employees
    • must be on payroll and submitted via RTI on or before 23 September
      2020.
      • For the first three months of the scheme the
      employee must work at least 33% of their usual hours. After 3 months, the
      Government may look to increase this minimum hours threshold.
      • each short-time working arrangement
      must cover a minimum period of seven days.

Employees do not need to have been previously furloughed in order to use the Job Support Scheme

What will be covered by the scheme?

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.

  • The employee must work at least 33% of their usual hours
  • For the hours worked, employees must be paid at their normal contracted rate

What is not included?

Employers will not be able to claim for employer costs under this scheme.   This means the employer will need to cover the cost of any employer national insurance contributions or employer pension contributions. 

There is a line in the fact sheet that will need to be clarified. “Our expectation is that employers cannot top up their employees’ wages above the two-thirds contribution to hours not worked at their own expense. “

Employee Protections

Employees cannot be made redundant or put on notice of redundancy during the period the employer is claiming under the Job Support Scheme.

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.

This agreement must be made available to HMRC on request.

HMRC also intend to inform employees about details of claims linked to them.

Example

For an employee earning £2,000 per month working half their usual hours, they can expect to receive:

  • £1,000 worked hours
  • £333 government grant
  • £333 employer contribution
  • Total of £1,666 gross pay

Another example, an employee usually works 36 hours per week at £10 per hour

  • 12 hours actually worked, leaving 24 not worked
  • £120 worked hours  (12 x £10)
  • £80 from government (8 x £10)
  • £80 from employer (8 x £10)
  • Total of £280 gross pay

How to make a claim?

Employers will be able to make claims online from December 2020. Claims will be paid on a monthly basis.

The grants will be paid in arrears so employers will need to make the payments to employees and submit via RTI before they can make a claim.

Job Retention Bonus

Employers will still be able to claim the Job Retention Bonus for eligible employees alongside the Job Support Scheme

Important to note

Please remember not all of the details are known at present.  We will need to wait for further guidance to be published.  

Keep an eye out for updates on social media and on this page. 

Links to Government information

Winter Economy Plan – https://www.gov.uk/government/publications/winter-economy-plan/

Job Support Scheme Fact Sheet – https://www.gov.uk/government/publications/job-support-scheme

Chancellor Outlines Winter Economy Plan – https://www.gov.uk/government/news/chancellor-outlines-winter-economy-plan

Updates to page

Added examples and included details about making agreements with employees

Original published

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