Job Support Scheme

The chancellor announced that as part of the Winter Economy Plan there would be the introduction of a new Coronavirus Job Support Scheme from 1 November 2020.

The scheme will run until 30 April 2021 and is designed to help support viable employers who face a lower demand due to COVID-19. The aim is this scheme will help keep their workforce in employment.

Full details have not yet been made available. However, we have summarised below what we currently know.


Key Facts for Employers

  • You cannot make an employee redundant or put them on notice of redundancy during the period you have them included on a Job Support Scheme claim.
  • Employers need to pay employees for the hours worked, plus a percentage of the usual hours that are not worked. This means the employer, must meet the salary costs of at least 55%, in addition to all employer national insurance and pension contributions costs.
  • The contribution the Government will make will be capped at £697.92 a month.
  • The grant will not cover national insurance or pension contributions.
  • You should not be topping up employees pay, as the expectation is you cannot afford to do this at your own expense.
  • The claims need to be submitted on a calendar basis and can be submitted 1 month in arrears, via the Gov.UK website. Employees should therefore receive payment, prior to a claim being submitted to HMRC.
  • Usual wages will be calculated under similar rules as the Coronavirus Job retention scheme, so this will vary between fixed paid and variable paid employees.
  • You must agree all-new short term working arrangements with your employees and notify them in writing of all changes to be made. This may also include making and getting their agreement to any necessary changes to their contract of employment.
  • Large employers should not be making any capital distributions whilst using the scheme, such as dividend payments or share buybacks.
  • Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria for the payment.

Which Employees Are Eligible?

  • The employee must be on the employer’s payroll on or before 23 September 2020, with their payroll information having been submitted to HMRC on an RTI submission, by this same date.
  • The employee must work at least 33% of their usual working hours, during the first three months of the scheme. This threshold may change in future months.
  • The employees can move on and off of the scheme and do not have to work the same monthly set pattern. Each short time working arrangement must however last at least 7 days.

Which Employers Are Eligible?

  • All employers with a UK bank account and UK PAYE scheme.
  • The employer does not need to have used the Coronavirus Job Retention Scheme in order to qualify for this scheme.
  • Large businesses will have to meet a financial assessment test. Not test will be imposed for small or medium businesses.

Examples

1. An employee earns £2,000 per month and works half their usual hours.

The employee would receive total pay of £1,666, being:

  • £1,000, payment from the employer for hours worked, 50% of £2,000
  • £333, employer contribution for hours not worked, 1/3 of 50% of £2,000
  • £333, government grant, which would be paid by the employer then claimed back from HMRC

2. An employee is contracted to work 5 days a week and earns £400. The employee agrees to accept a short time working arrangement of working 2 days per week, meaning they work 40% of their usual hours and not work for 60% of the time.

The employee would receive total pay of £320, being:

  • £160, payment from the employer for hours worked, 40% of £400
  • £80, employer contribution for hours not worked, 1/3 of 60% of £400
  • £80, government grant, which would be paid by the employer then claimed back from HMRC

Get in touch

If you have any questions about the Job Support Scheme, please get in touch with our Employer Advisory Team: EmployerAdvisoryTeam@hlca.co.uk