We have now had an update from the Chancellor outlining a new Job Support Scheme that will start from 1 November 2020 and will run for 6 months until end April 2021.
The scheme is aimed at supporting viable jobs in businesses where demand is impacted by Covid and demand is lower over the winter months.
This is how the scheme will work:
- The employer will continue to pay for the hours the employee works (which must be at least 33% of their contracted/usual hours for the first 3 months and this will be reviewed by the Government after 3 months with a view to raising that figure)
- The employee must have been on the payroll on or before 23 September 2020 (RTI submission including the employee made by this date)
- The employer will contribute 1/3 of the unworked hours (no cap)
- The Government will contribute 1/3 of the unworked hours (up to a cap of £697.92 per month)
- This ensures the employee receives 77% of their usual salary (where salary is under the Government cap)
- However, the grant will not cover NIC’s or auto enrolment pension contributions – although these will still be payable to the employee
- Employers using the Job Support Scheme will also be able to claim the Job retention bonus (subject to eligibility to claim the bonus)
- Neither the employer or employee needs to have previously used the furlough scheme
- Large businesses will need to meet a financial assessment test to be eligible – this test does not apply to small and medium businesses
- Employees can be placed on and taken off this scheme during the 6 months, but each cycle of short time work must be for at least 7 days
- Employees who were on furlough before November must be paid their usual salary (their contracted salary) and not their furlough wage
- The Government will not allow any top up of salary over the 2/3 by the employer and Government
- Employees cannot be made redundant or put on notice of redundancy whilst claiming for the grant
- Payments will be made in arrears and HMRC will be checking claims made
- Employers must write to employees to agree the change and the letter of agreement must be provided to HMRC on request
- HMRC are planning to write to employees directly to inform them that a claim has been made for them
For any guidance on how to make use of this scheme in your business and how to agree to contractual changes, please contact us directly.