09 Oct Job Support Scheme Guidance

The government has announced new measures designed to protect the jobs of worked affected by the Covid-19 pandemic, including the Job Support Scheme, which is aimed at businesses facing lower demand over the winter months. The scheme is intended to keep employees working shorter hours, rather than being made redundant. It will open on 1 November 2020 and will run for 6 months.

Operation of the Scheme

To qualify for the scheme, the employee must work at least 33% of their usual hours, and they will continue to be paid by their employer for the time that they work. For the remaining hours not worked, this will be split 3 ways:

• The state pays 1/3^rd (up to a cap – discussed below)
• The employer pays 1/3^rd
• The employee loses 1/3^rd

For example, if an employee works 33% of their hours, their total earnings will be as follows:

• 33% + (1/3^rd of 67%) = 55% by their employer
• 1/3^rd of 67% = 22% by the government

The employee would therefore earn 77% of their usual pay.

However, the grant paid by the government is capped at £697.92 per month. This grant payment 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.

Employees who have previously been furloughed will have their underlying usual hours to calculate their usual wages, not the amount they were paid while on furlough.

Eligibility

All employers with a UK bank account and UK PAYE scheme can join the scheme. It is open to all small and medium enterprises, but large business will need to prove that their turnover has fallen due to Covid-19.  Neither the employer or employee needs to have previously used the Coronavirus Job Retention Scheme.

The employee must be on an employer’s payroll on or before 23 September 2020 to be eligible for the scheme. The government may increase the 33% minimum hours threshold after the first 3 months of the scheme.

Claims

Employers will be able to claim online through gov.uk from December 2020, and will be paid on a monthly basis. A claim can only be submitted in respect of a given pay period after payment to the employee has been made and that payment has been reported to HMRC via RTI.

HMRC will check claims that are made, and payments will be withheld or will need to be paid back if a claim is found to be based on incorrect information.