The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce. The company 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 Government will pay a third of the 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 idea is that employers will pay their staff for the number of hours worked in their business as usual. However, for the hours you are contracted to work, but you do not work, the Government and your employer will split the pay. The Government will pay 1/3 of the hours not worked (capped at £697.92 a month) and your employer will pay the rest up to 80%. This means employees will earn 80% pay of the hours they do not work.
In summary you will take 100% of your wage for actual hours worked in the business and 80% of your wage for the hours you are contracted to work, but you did not work in the business, due to unforeseen circumstances with COVID-19.
Employers– All employers with a UK bank account and UK PAYE schemes can claim the grant. Large businesses will need a financial assessment test as this scheme will only be provided to those who are experiencing a low turnover due to Covid-19 impact.
Employees– Employees must be on an employer’s PAYE payroll on or before 23rd September 2020. Submission notifying payment of an employee to HMRC must have been made on or before 23rd September 2020. This means submitting Real Time Information (RTI).
For the first three months of the scheme employees will be required to work at least 33% of their usual hours. After those three months, The government will consider whether to increase this minimum hour threshold.
How to claim
The Job Support Scheme will be active from the 1st November 2020 and run until the end of April 2021. Employers will be able to make a claim through the Gov.uk website from the 1st December 2020. Payment after a successful claim will made on a monthly basis. The claim can only be submitted in any given pay period, after payment to the employee has been made and that payment has been reported to HMRC via a Real Time Information return (RTI).
HMRC intend to publish the names of employers who have used the scheme. The public can report fraud to HMRC if they have evidence to suggest an employer is abusing the scheme.
Employees will be able to check if their employer has made a claim relating to them via their Personal Tax Account (sign up on GOV.UK).
- HMRC will check claims and retain any claims found to be fraudulent or showing incorrect information. A full claim must be made by the employer and agreed with their staff. Employees must be notified in writing of any changes made to their contract.
Example given by the Government
- Beth normally works 5 days a week and earns £350 a week. Her company 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.
- And for the time she is not working (3 days or 60%, worth £210), she 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.
If you would like further information about the Job Support Scheme please contact us on the details below
(E) firstname.lastname@example.org or (T) 01908 219100 (W) advaloremgroup.uk