Published on 30/09/2020
Job Support Scheme
In a bid to stave off a wave of expected redundancies when the Government's Job Retention Scheme and furlough end on 31st October, the Government has outlined plans for a new Job Support Scheme aimed at protecting employment in what the Government calls “viable jobs”. The financial burden of keeping people in work will now be shared by the Government and employers who will continue to support wages and employees who will need to agree to reduced hours and pay.
What you need to know
Furlough and the Job Retention Scheme will end on the 31st October 2020 when your employees return to work on their normal hours and pay. If your business will not be able to support those employees returning to work, the job share scheme may provide assistance to protect jobs.
Under the Job Support Scheme, the Government will pay a third of hours not worked up to a cap with the employer also contributing a third of pay. This ensures that the employee will continue to receive 77% of their pay.
The new scheme starts on the 1st November 2020 and will run for an initial period of 6 months until April 2021. Your company doesn’t need to have used the furlough scheme or had employees on furlough in order to seek assistance through the Job Support Scheme.
All employers with a UK bank account and PAYE scheme are eligible although larger businesses will need to meet a financial assessment test and any larger businesses who do receive support from the Job Support Scheme will be expected not to make dividend payments or other capital distributions whilst in receipt of Job Support Scheme assistance.
SME’s will not be required to meet a financial assessment test. SME’s are generally defined as a company which meet two out of three of the following criteria: (i) turnover of less than £25m (ii) fewer than 250 employees and/or (iii) gross assets of less than £12.5m.
To qualify, employees must be on payroll on or before the 23rd September 2020. For the job to be “viable”, the employee must work at least 33% of their usual hours during the first 3 months of the scheme. Employees will be able to cycle on and off the scheme and do not have to be in the same working pattern each month but each short time working arrangement must cover a minimum period of 7 days.
The employee must work at least 33% of their usual hours. For time worked, the employee must be paid their normal rate of pay. For time not worked, the employee will be paid up to two-thirds of their usual wage (not furlough pay rate).
In a change from the Job Retention Scheme, employees cannot be made redundant or put on notice of redundancy during the period when their employer is claiming the grant through the Job Support Scheme.
As with the Job Retention Scheme, payments are made in arrears. The payment which is capped at £697.92 a month will not cover Class 1 employer NIC or pension contributions and note that pension contributions continue to be payable as usual by the employer. Claims for support can be submitted through gov.uk from December 2020 and will be paid on a monthly basis in arrears.
Employers who retain staff in the Job Support Scheme or who have returned to work from furlough will remain eligible for the Job Retention bonus of £1,000 per employee in January 2021.
If your business is unlikely to be able to meet the minimum costs for the Job Support Scheme, you may need to consider costs, cuts and redundancies. For advice and support with redundancy or restructuring please contact Judith Curran on 01689 887812 or email: firstname.lastname@example.org