The government’s announcement that the Job Support Scheme will replace the Job Retention Scheme at the end of October for at least the next six months has forced us to realise that these measures are only temporary.

The ever-changing details and that the additional requirement to prepare, file and record these claims are not going away.

 

Here are the key points explaining the new Job Support Scheme.

 

Key Points

• The Job Support Scheme will open on 1^st November and run for six months until April 2021.
• The Job Support Scheme is designed to protect viable jobs in businesses facing lower demand over the winter months.
• The employer will continue to pay employees 100% of their pay for time actually worked.
• The financial burden of the time not worked will be split between the employer, the employee and the Government in an effort to save jobs.
• This will mean the employee suffers a wage reduction for the hours not worked but remains employed.
• The government will pay one-third of hours not worked up to a cap of £697.92 per month with the employer also contributing a third.
• This ensures employees will earn a minimum of 77% of their normal wage where the contribution is not capped.
• Employers using the Job Support Scheme will still be able to claim the job retention scheme bonus.
• This Job Support Scheme will be open to employers across the UK even if they have not used the furlough scheme.

 

Eligible employees: An overview

• Employees must be on an employer’s payroll on or before 23^rd September 2020 to qualify.
• In order to support viable jobs for the first three months of the Job Support Scheme the employee must work at least 33% of their usual hours.
• This minimum hours threshold will be reviewed for increase after three months.
• Grant payments will be made in arrears and designed to reimburse the employer.
• The grant will not cover employers’ NIC or pension contributions, these will remain payable by the employer.

 

Example

John usually works 5 days per week and earns £350 per week. The pandemic has caused a reduction in demand and John’s employers make use of the Job Support Scheme in order that they can benefit from keeping John on the team, but not suffer the full financial burden of paying him.

As a result, John works 2 days per week (40% of his usual commitment) and earns £140. For the 3 days that John is not working he will be paid 67% of his usual pay. Therefore the £210 that John would normally be paid is reduced to £140.

The government will give John’s employer £70 toward the costs of keeping John employed but will reimburse the employer in arrears.

As always if you have any questions please don’t hesitate to contact us.