“Since the lunchtime yesterday announcement more detail has been made available to support the statement made by the Chancellor. Shown below is the information currently available no doubt there will be some tweaks to the system and updated guidance before the scheme goes live in November.
To support viable UK employers who face lower demand due to COVID-19, and to keep their employees attached to the workforce, the government will be introducing a new Job Support Scheme from 1 November 2020. Employees will need to work a minimum of 33% of their usual hours. For every hour not worked the employer and the government will each pay one third of the employee’s usual pay, and the government contribution will be capped at £697.92 per month. Employees using the scheme will receive at least 77% of their pay, where the government contribution has not been capped. The employer will be reimbursed in arrears for the government contribution. The employee must not be on a redundancy notice.
This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they cannot work.
The scheme will run for six months from 1 November 2020 and is open to all employers with a UK bank account and a UK PAYE scheme. All Small and Medium-Sized Enterprises (SMEs) will be eligible; large businesses will be required to demonstrate that their business has been adversely affected by COVID-19, and the government expects that large employers will not be making capital distributions (such as dividends), while using the scheme.”
Employees can work more than one third of their contracted hours and still be eligible for the scheme, but the amount the government will pay is reduced*
So, for example, if someone earning £2,000 a month was working half their hours, they would get £1,000 normal pay. Taking advantage of the Job Support Scheme means the employer would then get £333 extra from their employer and £333 from the government.
The scheme is open to small and medium-sized businesses (usually defined as firms with 250 employees or less). Large businesses whose revenue has fallen because of coronavirus will also be eligible but will have to meet a financial assessment test.
The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme, with further guidance being published in due course.
The Job Support Scheme is designed to sit alongside the Jobs Retention Bonus, businesses can benefit from both schemes to help protect jobs.
To be eligible, employees must have been on the employer’s Real Time Information submission on or before 23 September 2020 New employees taken on after that time will not be elligible
the minimum 33% threshold hours for which an employee must work may be increased in months 4-6 of the scheme
- working patterns can vary, but each short-time working arrangement must cover a minimum period of seven days
- the government’s grant will not cover Class 1 employer NIC or pension contributions, although they remain payable by the employer
- ‘usual wages’ will follow a “similar” methodology to the CJRS
This a changing situation and no doubt more guidance will be issued in the coming days and weeks including what changes may need to be made to employment contracts to reflect this hybrid situation
For individual guidance plee contact me.