Job Support Scheme – A Plan For Jobs

Job Support Scheme

The new Job Support Scheme has been introduced by the government to protect jobs within businesses that are facing a lower demand due to COVID-19, which will only be exacerbated by the coming winter months.

With the Coronavirus Job Retention Scheme (CJRS) set to end on 31st October, the new Job Support Scheme will provide continued support for those who still need it, but will also help those businesses that have not previously claimed under the CJRS.

How does it work?

Where employers are able to support their employees by providing some work, the employee should be paid their usual wage for the hours worked. The government and the employer will then both pay a third of the usual wage for the hours not worked.

The government contribution will be capped at £697.92 per month, and will only cover wages – there will be no reimbursement of Employers NI or pension contributions.

Because the government has introduced this scheme to assist businesses facing lower demand, and therefore a reduced income, it is expected that employers will not ‘top up’ their employees’ salaries.

Who is eligible?

Employers:

  • All employers with a UK bank account and a PAYE scheme – it is important to note that there is no requirement for employers to have previously used the Coronavirus Job Retention Scheme to be eligible for this new scheme.
  • While large businesses will have to undergo a financial assessment test to determine eligibility, SME’s will not be required to do this.
  • The Government expects that large employers will not be making any capital distributions, e.g. dividend payments or share buybacks – more information on this will be released in the coming weeks.

Employees:

  • An employee paid under the scheme must have been on the employer’s payroll on or before 23rd September 2020.
  • For the first three months of the scheme, the employee must work at least 33% of their usual hours. This will then be reviewed, and this percentage may increase.
  • Employees do not need to work the same hour pattern each month, and can be put on and taken off the scheme as required. However, each arrangement must cover a minimum of seven days.

The Job Support Scheme is set to run from 1st November to the end of April 2021.

Similarly to the Coronavirus Job Retention Scheme, claims for the Job Support Scheme will be made online via the HMRC portal.

As all claims will be paid in arrears (after the employee has been paid) employers will be able to make their first claim for November in December.

Key Points

  • Employers do not need to have previously utilised the Coronavirus Job Retention Scheme to be eligible for this new scheme.
  • Using the Job Support Scheme will not exclude employers from being able to claim the Job Retention Bonus if they meet the eligibility criteria.

For any questions on the Job Retention Scheme, please get in touch