What is the Job Support Scheme?

Rishi Sunak’s new support package to replace the furlough scheme will open on 1 November 2020 and run for 6 months, until April 2021.

How will the Job Support Scheme work?

Claims can be made from December 2020 and will be paid on a monthly basis in arrears – that is after the employee has been paid and HMRC notified through the Real Time Information (RTI) submission.

Employees will be paid in full by their employer for time worked but, for hours not worked, the cost will be split between the employer, the Government (through wage support) and the employee (through a wage reduction).

The Government will pay a third of hours not worked up to a cap of £697.92 a month. The grant will not include Class 1 employer NICs or pension contributions and these will remain payable by the employer.

The employer will also contribute a third – the Government’s expectation is that employers cannot top up their employees’ wages above the two-thirds level.

Where the cap does not apply, this will mean that employees receive at least 77% of their normal wages.

Breakdown of wages under the Job Support Scheme

 

Hours Employee Worked 33% 40% 50% 60% 70%
Hours Employee Not Working 67% 60% 50% 40% 30%
Employee Earnings (% of normal) 78% 80% 83% 87% 90%
Gov’t Grant (% of normal wages) 22% 20% 17% 13% 10%
Employer Cost (% normal wages) 55% 60% 67% 73% 80%

The only condition for small and medium enterprises is that the employer has a UK bank account and UK PAYE scheme. Large businesses will need to show turnover has fallen following COVID-19.

The Government expects that large employers using the Scheme will not make capital distributions, such as dividend payments or share buybacks (further details of this will be included in the future guidance).

The scheme is available irrespective of claims made under the Coronavirus Job Retention Scheme and has no impact on eligibility for the Job Retention Bonus.

Who is eligible for the Job Support Scheme?

To be included in the scheme, an employee must:

  • be on an employer’s PAYE payroll on or before 23 September 2020 – that is a Real Time Information (RTI) submission notifying payment to that employee must have been made on or before this date.
  • work at least a third of their normal hours for the first three months of the scheme operating. This threshold may increase after this point.

Employees can move in and out of the scheme and do not have to work a consistent pattern. However, each period must cover a minimum of seven days.

The scheme will use “usual wages” calculations similar to the Coronavirus Job Retention Scheme. Where staff have previously been furloughed, the calculation of usual pay and/or hours will be based on their underlying contracts, not the amounts whilst on furlough.

Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.

In line with the other support schemes, HMRC will carry out checks and may withhold or require repayment of claims made fraudulently or based on incorrect information.

How can we help?

Please get in touch or contact your engagement partners at Simmons Gainsford if you would like more information or need any assistance.

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