Yesterday the Chancellor announced a new Job Support Scheme. Read on to find out more.
What is it?
A scheme under which the Government refunds to employers part of the wage cost of employees on short-time working.
When does it start?
It starts on 1 November 2020.
How long will it last for?
It will run for 6 months.
Which employers are eligible?
SMEs are definitely eligible. Large employers will have to meet a financial assessment test, as the scheme is only open to large employers whose turnover is lower now than it was before Covid-19. The initial guidance says that “Our expectation is that large employers using the Job Support Scheme will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant”.
Which employees does it cover?
Employees would need to be on the employer’s PAYE payroll on or before 23 September 2020 (i.e. they must be on a Real Time Information (RTI) submission on or before 23 September). For an employee to qualify, they must, for the first three months of the scheme, be working at least 33% of their normal contractual hours. That minimum will be reviewed later.
The employee’s working pattern can vary, but each short-time working arrangement must cover a period of at least 7 days.
The employee does not have to have been furloughed under the CJRS to be eligible under the Job Support Scheme.
What does the grant cover?
The employer pays for the hours worked, as normal. The part of the employee’s normal working week that is not worked is split into three. One third is paid by the employer, another third by the Government and the last third, in effect, by the employee (as an agreed wage cut during the scheme).
The grant does not cover Class 1 NI Contributions or employer pension contributions – these are still payable by the employer.
Wages are as they were before any adjustments were made under the CJRS.
Is there a maximum grant?
The Government’s contribution is capped at £697.92 per month.
How do employers claim?
Through an on-line Gov.uk portal. The claim is made in arrears. The first claims can be made from December 2020.
Are there any other conditions?
The guidance is still quite sparse and inevitably more will follow. One thing that is definitely in the scheme is that a grant claim cannot be made in relation to an employee who has been given notice of redundancy.
What about the Job Retention Bonus?
That will still operate. If an employee meets the requirements for the Job Retention Bonus to be paid, they can still be the subject of a claim for a Job Support Scheme grant.
Crucially, short-time working under this new scheme, just as with the CJRS, requires agreement between the employer and the employee and the change must be recorded in writing.
Further information will become available gradually, as with the CJRS, and it should not be assumed that each new round of guidance will be consistent with the last. This summary will be updated as and when new information becomes available.