08 Oct The new Job Support Scheme: What do you need to know about it?
Updated: 29/10/20 using the government website.
As we all know the Coronavirus Job Retention Scheme will be coming to an end as of this month leaving many employers and employees worried about the future. To the relief of many, Chancellor Rishi Sunak announced on the 24th September that there will be a new subsidy in the form of a less generous job support scheme. This will encourage employees to return to work and hopefully reduce the number of redundancies in the UK.
How will the new Job Support Scheme work?
The key points on the new Job Support Scheme are:
- The minimum hours required for employees to work has dropped from 33% to 20% and the employer contribution for non-worked hours has dropped from 1/3 to 5%.
- Employees will need to work a minimum of 20% of their usual hours (pre-furlough). This means that employees working as little as one day a week are now eligible for the scheme.
- After the employee has worked 20% of their usual hours the rest of the hours are split like so:
- 27% of employees’ unworked hours are unpaid.
- 5% of employees’ unworked hours are paid by the employer at their normal rate.
- 61.67% of employees’ unworked hours are funded by the new Job Support Scheme.
- For every hour not worked by the employee, they will be paid two-thirds of the employee’s usual hourly pay with the contribution from the government, being capped at £1,541.75 per month.
- Employees using the scheme will receive at least 73% of their pay, where the government contribution has not been capped. The employer will be reimbursed in arrears for the government contribution.
- Employers must pay employer National Insurance Contributions and pension contributions.
- The scheme is open to all employers with a UK bank account and a UK PAYE scheme.
This scheme will last for six months beginning on the 1st November 2020 and will run until the 30th April 2021.
Who can claim the new Job Support Scheme?
This grant is available to all Small and Medium-Sized Enterprises (SMEs); large businesses will be required to demonstrate that their business has been adversely affected by COVID-19, and the government expects that large employers will not be making capital distributions (such as dividends), while using the scheme.
The employees eligible for this scheme must have been on the employer’s Real Time Information submission on or before 23rd September 2020. In addition to this, employees working patterns can vary, but each short time working arrangement must cover a minimum period of seven days.
Importantly, the government’s grant will not cover Class 1 employer NIC or pension contributions, although they remain payable by the employer. Furthermore, the employee must not be on a redundancy notice.
Example: “If someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.”.
We understand that this is a changing and unpredictable time for all so we would advise to keep up to date on the scheme and check out the Government website here. They have a factsheet and more information on how to claim the new Job Support Scheme grant.
Should you require any additional information or HR support, please don’t hesitate to get in-touch with our multi-award-winning team here!