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Job Support Scheme Announced - Here's the facts

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Update 22 October 2020. 

Chancellor Rishi Sunak has just announced a further amendment to the Job Support Scheme, which is due to begin on 1st November 2020.

 

When originally announced, the Job Support Scheme required employees to work a minimum of 33% of their normal hours. This has now been reduced to 20%, meaning that employees working as little as one day a week are now eligible for the scheme.

Additionally, the employer contribution to the ‘unworked’ hours has been significantly reduced to 5%.

We understand that Employers will continue to receive the £1,000 Job Retention Bonus.

 

Update 9 October 2020.

In light of the possible closure of businesses by UK law in local areas, today (9/10/20), the Chancellor added an ‘expansion’ to the Job Support Scheme, due to start on 1 November 2020.

 

For any business who has been forced to close by UK law, the government will pay two-thirds of their employees’ wages. It has not been announced which businesses will be asked to close and which areas of the country will be affected. We will provide an update when further details are released.

 

Winter Economy Plan, Job Support Scheme.

On Thursday 24th September, the Chancellor, Rishi Sunak, announced the government’s next steps for supporting businesses during the Coronavirus pandemic. The Coronavirus Job Retention Scheme (CJRS) is due to end on 31st October 2020. Unlike earlier this year, the scheme has not been extended, but in its place the Job Support Scheme (JSS) has been announced. The scheme is aimed at those in work, as opposed to the CJRS which supported those staying at home.

 

The scheme, which opens on 1st November 2020, is the next phase of government support for struggling businesses to boost job retention and get people back to work.

                                                                                                             

When is the scheme available?

The Job Support Scheme will open on 1st November 2020 and will run until 30th April 2021, for 6 months.

 

Who is eligible for the scheme?

All employers with a UK bank account who use the UK PAYE schemes are eligible to claim the grant for employees. Unlike the previous changes to the CJRS, neither the employee nor the employer needs to have been enrolled on the CJRS to claim on the new JSS.

 

SME’s (business with 250 employees or less) are automatically eligible for the scheme, however, large businesses will be required to meet a financial assessment test. Businesses who are in this category will need to provide evidence that the pandemic has had an adverse effect on their turnover.

 

How does the scheme work?

The company will pay the employee for any hours that they have worked (a minimum of 33%), with the hours that were not worked being paid and split in the following way:

 

• The government, through the Job Support Scheme  (this will be capped at £697.92 per month)

• The employer

• The employee, through pay reduction

The scheme provides that employees would receive 77% of their normal pay, where the Government contribution has not been capped.

 

Employees will be required to work a minimum of 33% of their normal hours to start with, the government have advised that this percentage may be increased in months 4-6 of the scheme.

 

What needs to be agreed with employees?

Employers must agree the shorter working hours with employees and make changes to contracts. This must be in writing and agreed by the employee. HMRC could request this at any point.

 

What does this mean for the employee?

• For the time employees work they must be paid their normal contracted pay

• For the time the employee is not at work, they may receive up to two-thirds of their usual pay (where the Government contributions has not been capped).

 

There are still many unknown facts surrounding scheme, such as how holidays and sickness will affect an employer’s claim, once more details and information are made available we will send out an update.

Please see below the government working example, the full fact sheet can be found here.

 

Examples

• Beth normally works 5 days a week and earns £350 a week. Her company is suffering reduced sales due to coronavirus. Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).

• Her employer pays Beth £140 for the days she works.

• And for the time she is not working (3 days or 60%, worth £210), she will also earn 2/3, or £140, bringing her total earnings to £280, 80% of her normal wage.

• The Government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of her normal wages) to Beth’s employer to support them in keeping Beth’s job.

 

 

Hours employee worked

 

33%

 

40%

 

50%

 

60%

 

70%

 

Hours employee not worked

 

67%

 

60%

 

50%

 

40%

 

30%

 

Employee earnings (% of normal without Government cap)

 

78%

 

80%

 

83%

 

87%

 

90%

 

Gov’t Grant

 

22%

 

 

20%

 

17%

 

13%

 

10%

 

Employer Cost

 

 

55%

 

60%

 

67%

 

73%

 

80%

Table and working example taken directly from the Government Job Support Scheme Fact Sheet

 

Got a question?

Speak to a member of our Employment team or contact us today.