Job Support Scheme: What You Need To Know

The Job Support Scheme is to being introduced now that the Job Retention Scheme, or furlough scheme, is finishing at the end of this month.

The chancellor Rishi Sunak was obviously hoping that the furlough scheme that has been running these last few months to help businesses retain their employees would be enough. But Covid-19 is showing no sign of releasing its grip on the population just yet, so further measures are essential in a bid to save jobs and businesses.

Job Support Scheme Details

The Job Support Scheme is by no means as all encompassing as the Job Retention Scheme. Here are some details on this scheme below which may prove useful to you, gleaned from the Job Support Scheme Factsheet which you can check out at the following link: Job Support Scheme Info:

1. What is it?
   “• The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce. The company will continue to pay its employee for time worked, but the burden of hours not worked will be split between the employer and the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
   • Now the economy is opening up, we should target support on those businesses that need it most: focusing on those that are being impacted by Coronavirus and who can support their employees doing some work, but that need more time for demand to recover.
   • The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
   • Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
   • The scheme will open on 1 November 2020 and run for 6 months, until April 2021.
   Further guidance will be published shortly.
2. Who is eligible?
   I. Employers
   • All employers with a UK bank account and UK PAYE schemes can claim the grant.
   Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.
   • Large businesses will have to meet a financial assessment test, so the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19. There will be no financial assessment test for small and medium enterprises (SMEs).
   • Our expectation is that large employers using the Job Support Scheme will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant. Further details will be set out in guidance.

Employees
• Employees must be on an employer’s PAYE payroll on or before 23 September. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.
• In order to support viable jobs, for the first three months of the scheme the employee must work at least 33% of their usual hours. After 3 months, the Government will consider whether to increase this minimum hours threshold.
• Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.

What does the grant cover?
• For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee. The Government contribution will be capped at £697.92 a month.
• Grant payments will be made in arrears, reimbursing the employer for the
Government’s contribution. The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
• “Usual wages” calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme. Full details will be set out in guidance shortly. Employees who have previously been furloughed, will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough.
• Employers must pay employees their contracted wages for hours worked, and the Government and employer contributions for hours not worked. Our expectation is that employers cannot top up their employees’ wages above the two-thirds contribution to hours not worked at their own expense.

What does it mean to be on reduced hours?
• The employee must be working at least 33% of their usual hours.
• For the time worked, employees must be paid their normal contracted wage.
• For time not worked, the employee will be paid up to two-thirds of their usual wage.
• 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.”

Help & Support For Your Business

If you need any help with any of the above, or any other accountancy related/tax related issue, we are here to help. If you want expert guidance through these turbulent times get in touch with the WHR Accountancts team by calling 028 3752 2909.