Information subject to change – Please refer to the UK Government website for the most up-to-date position.
The Coronavirus Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19.
The employer will continue to pay its employee for time worked, but the burden of hours not worked will be split between the employer and the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
The Scheme is designed to support those businesses impacted by Coronavirus and who can support their employees doing some work, but need more time for demand to recover.
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.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
The scheme will open on 1 November 2020 and run for 6 months, until April 2021.
Who is eligible?
All employers with a UK bank account and UK PAYE schemes can claim the grant, and neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme. However, employees must be on the employer’s payroll before 23 September 2020 to be eligible for a claim.
Large businesses will have to meet a financial assessment test, so the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19. There will be no financial assessment test for small and medium
For the first three months of the 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 will be able to cycle on and off the scheme and do not have to be
working the same pattern each month, but each short-time working arrangement
must cover a minimum period of seven days.
What does the grant cover?
For every hour NOT worked by the employee, both the Government and employer
will pay a third each of the usual hourly wage for that employee. The Government
contribution will be capped at £697.92 a month.
Grant payments will be made in arrears, reimbursing the employer for the
Government’s contribution. The grant will not cover Class 1 employer NICs or
pension contributions, although these contributions will remain payable by the
“Usual wages” calculations will follow a similar methodology as for the Coronavirus
Job Retention Scheme. Full details will be set out in guidance shortly. Employees
who have previously been furloughed, will have their underlying usual pay and/or
hours used to calculate usual wages, not the amount they were paid whilst on
Employers must pay employees their contracted wages for hours worked, and the Government and employer contributions for hours not worked.
What does it mean to be on reduced hours?
• The employee must be working at least 33% of their usual hours.
• For the time worked, employees must be paid their normal contracted wage.
• For time not worked, the employee will be paid up to two-thirds of their usual wage.
• Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.
How can I claim?
The scheme will be open from 1 November 2020 to the end of April 2021 and employers will be able to make a claim online through Gov.uk from December 2020, with claims will be paid on a monthly basis.
Grants will be payable in arrears, meaning that a claim can only be submitted in respect of a given pay period after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.
HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. 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.
Beth normally works 5 days a week and earns £350 a week. Her employer is suffering reduced sales due to coronavirus. Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).
• Her employer pays Beth £140 for the days she works.
• For the time she is not working (3 days or 60%, worth £210), Beth will also earn 2/3, or £140, bringing her total earnings to £280, 80% of her normal wage.
• The Government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of her normal wages) to Beth’s employer to support them in keeping Beth’s job.
Contains public sector information licensed under the Open Government Licence v3.0.
Last updated on 25 September 2020
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