13 Oct 2020 2:49 PM

How does the Job Support Scheme work?

The Job Support Scheme will open on 1st November and run to April 2021 (6 Months), this scheme is designed to protect viable jobs in businesses facing lower demand over the winter months due to the impact of Covid 19.  These businesses may be able to support their employees doing some work but need time for demand to recover and cannot pay them their usual contractual working hours.

Eligibility/Employers

  • Must have a UK bank account, and a UK PAYE scheme
  • Neither the employer nor employee needs to have previously used the CJR Scheme (the previous scheme that was in place)
  • Large businesses are expected to meet a financial assessment test, there will be no financial assessment test for small medium enterprises (SMEs)

Eligibility /Employees

  • On payroll and had an RTI transmission made on or before 23rd September 2020
  • For the first 3 months of the scheme the employee must work 33% of their usual hours, after 3 months the Government will review this threshold whether to increase the minimum hours to be worked
  • Each short time working arrangement must cover a minimum of 7 days

So what does the grant cover?

  • For every hour not worked, the employer and the government will pay a third each of the usual hourly wage
  • The government cap per month is £697.92
  • The grant will not cover Class NIC employer or pension
  • These remain payable by the employer

Valuable points

  • The calculation of usual wages will be a similar calculation as CJRS (the previous furlough scheme), confirmation will follow
  • Employers must pay employees wages for hours worked, employers cannot top up their wages past two thirds, or make any additional contributions to their wages at the employer's expense
  • After the employer has paid for hours worked, for the time not worked employees will be paid up to two-thirds of their usual wage (to a cap)
  • Employees cannot be made redundant or put on notice of redundancy during a period that the employer is claiming the grant
  • Employers must agree short-time working and notify the employee in writing
  • The intention is that HMRC will inform the employee directly the details of the claim made

How to Claim

Claims are in arrears and the claim line will open in December 2020, to claim the November grant amount due

Example

  • David works five days a week, for this his gross earnings are £350.00 as the company has suffered a downturn in orders.  Not wanting to make David redundant the company puts him on the Job Support Scheme from 1st November, David will by agreement reduce his working hours.
  • The company agrees with David to work two days a week (40%) for that the employer pays him £140.00 for hours worked
  • For the 60% of time (three days) David is not working £210.00, 2/3 will be paid (total £140.00).
  • 1/3 by the government £70.00 grant and 1/3 £70.00 by the employer
  • Taking David’s weekly salary to £280.00 per week or 80% of £350.00, his usual salary.

 

Employee Receives

Of which is paid by Employer

Of which is paid by Government

Usual pay - five days 

£350

£350

£0

New pay - working for two days

£140

£140

£0

2/3 of not working three days will be paid (2/3 of £210=£140)

£140

£70 (1/3)

£70 (1/3)

Total

£280

£210

£70

 

If you have any questions on how the new Job Support Scheme works please contact us.

Author: Sue Hancock