COVID-19 Job Support Scheme
Whilst we don't have all the facts yet surrounding the newly announced Job Support Scheme, we have set out below what we do know
Dated: 2 October 2020 Author: James Hunt, Employment Services Senior Manager
This guidance was last updated 2 October 2020
- The scheme will start 1 November 2020 and last for 6 months. Any employee on the scheme who is working at least 33% of their normal hours will receive 77% of their usual gross pay.
- If an employee works reduced hours then the employer pays for the hours worked, plus also 1/3 of the balance of pay for time not worked. The government will meet the cost of an additional 1/3 of pay for time not worked, subject to a cap of £697.92 per month.*
- The Government grant will be reimbursed in arrears.
- The scheme is aimed mainly at small and medium firms, although large businesses who can prove they have been adversely affected (e.g. turnover drop) by COVID-19 may be eligible. For larger businesses there will be restrictions on capital distributions, such as dividends, whilst using the scheme.
- UK Employers, with a UK bank account and a UK PAYE scheme can use this scheme even if they did not use the Furlough Scheme.
- Employers currently under notice of redundancy can’t be included, and employers will not be able to issue redundancy notices to employees who are on this scheme throughout its duration.
- Employers can also claim the Job Retention Bonus if they qualify.
- Employees must have been on the payroll, and included on an RTI submission notifying payment, on or before 23 September 2020
- Large employers will have to meet a financial assessment test. No details on this provided as yet
- For the first 3 months of the scheme an employee must work at least 33% of their usual hours. The Government is reserving the right to increase the minimum working requirement after that point
- Employees can come on and off the scheme. But each short-term working arrangement must cover a minimum of 7 days
- Employees must be notified in writing of any change to terms and conditions required to implement short time working. HMRC may request sight of agreements
- Claims can be made online, via Gov.uk, from December 2020. They will be paid monthly, in arrears
- An ambiguous statement which may suggest that employers will not be permitted to top up pay for time not worked above the two-thirds payment an employee will receive under the scheme, even if the employer would like to do so
- The Government will cover the cost of 1/3 of the employee’s usual hourly wage. Usual wage calculations will follow similar methodology as for the Job Retention Scheme. It can’t be based on any reduced pay entitlement arising from furlough leave
- Will not extend to employer NIC and pension costs. These costs remain payable by the employer
- HMRC will check claims and may withhold payment, or require a refund, if a claim is found to be fraudulent
- Employees will be notified by HMRC if they are the subject of a claim
Points still requiring clarification
- The definition of company size (and when large companies qualify) – this might follow the criteria for audit thresholds but remains to be confirmed
- The cap level* in relation to contributions as per the Coronavirus Job Retention Scheme.
- How to apply for the grant
As we receive further information, we will continue to update this page.
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