The Job Support Scheme
With the furlough scheme shortly coming to an end, Chancellor, Rishi Sunak has announced a new scheme for job retention as we head into the winter months – “The Job Support Scheme”.
The new scheme involves the Government supporting the wages of employees in work on shorter hours, to help businesses keep their employees in the workforce. The scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months as a result of Covid-19.
As the furlough scheme ends on 31 October 2020, the new scheme will open on 1 November 2020 and will run until the end of April 2021. It is targeted at businesses who are being impacted by Covid-19 but who can offer their employees some work.
In essence, employers must continue to pay employees for time worked but the cost of hours not worked will be split between the Government and the employer. The split equates to a third being paid by the Government (capped at £697.92 per month) and the employer also contributing a third.
The guidance released by the Government states that employees under the new scheme should receive a minimum of 77% of their normal wages, provided that the Government’s contribution has not been capped.
The intention behind the new scheme is for employees to remain in their jobs and for employers to avoid making redundancies.
Who is eligible?
So far, we know that all employers with a UK bank account and UK PAYE schemes can claim the grant. Large businesses will need to meet a financial assessment test and therefore the scheme is only available to those whose turnover is lower now than before it was experiencing difficulties from Covid-19.
Employees must be on an employer’s PAYE payroll on or before 23 September 2020 and a RT1 submission must have also been made on or before this date. Employees must work at least 33% of their normal hours for the first 3 months of the scheme. There will be the ability for employees to be able to ‘cycle on and off’ the scheme.
Employers do not have to have used the furlough scheme previously nor do the affected employees need to have been furloughed previously.
Please see click here to view further Government’s guidance on this.