Introducing the Job Support Scheme

The Job Support Scheme has been created to protect viable jobs over winter for businesses who are facing lower demand due to Coronavirus. This scheme will be initiated in November and it will continue until April 2021.

The employer will be expected to pay their employee for any time that has been worked, but any additional hours that haven't been worked will be split between the Government and the Employee. The Government will make a contribution through wage support, the Employee will pay their contribution through a wage reduction and the Employee will keep their job.

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.

If an employer chooses to use the Job Support Scheme, they will still be able to claim the Job Retention Bonus if they are eligible.

Which Employers are Eligible?

If you are an employer with a UK bank account and a UK PAYE Scheme, you can claim the grant, regardless of whether you have previously claimed through the Coronavirus Job Retention Scheme.

It will be a little easier for SMS's (Small & Medium Enterprises) as they will not need to meet a financial assessment. Larger companies must meet a financial assessment and the scheme is only available to those whose turnover is lower now than before as a result of Covid-19.

HMRC has stated the following "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 guidance will be provided at a later date.

Which Employees are Eligible?

For an employee to claim, they must have been on the Payroll on or before 23rd September 2020. This must have been sent via an RTI Submission to HMRC on or before that date.

As this support is here to protect only viable jobs, for the first three months of this 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 do not have to be working the same pattern each month and they will be able to cycle on and off of the scheme, but each short-time working arrangement must cover a minimum period of seven days.

What is covered by the grant?

For every hour not worked by an employee, both the Employer and the Government will each pay a third of the normal hourly wage for that employee. This contribution from the Government will be capped at £697.92 a month.

These payments will be made in arrears so that the employer will be reimbursed for the Government's contribution. Class 1 employer NICs and pension contributions will remain payable by the employer and will not be covered by the grant.

"Usual wages" calculations will follow a similar methodology as those that were used for the Coronavirus Job Retention Scheme. Where employees were furloughed, they will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough. More guidance will follow from HMRC.

Employers must pay employees their contracted wages for hours worked, and the Government and employer contributions for hours not worked.

Employee Reduced Hours & Pay

To claim the Job Support Scheme, an employee must be working at least 33% of their usual hours. When working they must be paid their normal contracted wage and the 'usual hours' that are not being worked will be paid up to two-thirds of their usual wage. During the time an employee is claiming the grant, employees cannot be made redundant or put on notice of redundancy.

How to claim

Employers can make a claim online using GOV.UK website. The scheme opens from 1st November 2020 and employers can claim from December 2020. Payments will be made on a monthly basis.

The payment to the employee must be made by the employer and the grants will be payable in arrears after any given pay period once the payment has been reported to HMRC using an RTI return.

HMRC Checks

It is important to note that HMRC will be checking claims. If incorrect or fraudulent information is given then payments may be withheld or they will need to be paid back to HMRC. Grants can only be used as reimbursement for wage costs actually incurred.

Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.

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