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Coronavirus: What's Changed? - Job Support Scheme
  
Coronavirus - Job Support Scheme

A new Job Support Scheme, aimed at protecting jobs where businesses are either facing lower demand due to Covid-19, or have been legally required to close temporarily due to Covid-19, will run for 6 months from 1 November 2020.

1. Lower demand - criteria

Where someone cannot work their normal hours they will still receive their normal pay (up to a limit).

The employer will pay for the hours actually worked, but for the hours not worked, the employer and the government will each contribute one third. The government contribution will be capped at £697.92 per month. 

This means employees will receive a minimum of 77% of their usual wages in total, unless capped  - see table below.

The government will not contribute anything to National Insurance or statutory pension contributions.

 

To be eligible, employees must:  

  • be registered on the PAYE payroll on or before 23 September 2020
  • work at least 33% of their usual hours, for the first 3 months of the scheme. The government has yet to decide whether this threshold will be increased for the following 3 months
  • work at least seven days on a short time basis, where they come on and off the scheme during the 6 months.

 

Employers must:

  • undergo a financial assessment (unless they are an SME (small or medium enterprise.
  • not be paying dividends or share buybacks.
  • not make the employee redundant while they are under the scheme.
  • agree the new short-time working arrangements with their employees, make any changes to the employment contract by agreement, and notify the employee in writing. If requested, they must provide it to HMRC.

 

Employers can apply for the grants from December after they have paid the employee. They will be paid monthly.

 

Example from the government’s Job Support Scheme factsheet.

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, which is 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.


2. Business temporarily closed - criteria

Where business premises have been legally closed as a result of coronavirus restrictions, employees will be paid, by their employer,  two-thirds of their normal pay up to a cap of £2100 per month.

Note the scheme does not apply to businesses closed by local public health authorities due to specific workplace outbreaks.

Employers will be able to claim the grant on a monthly basis from 1 December 2020.
The government will not contribute anything to National Insurance or statutory pension contributions.

 

To be eligible, employees must:  

  • be registered on the PAYE payroll on or before 23 September 2020
  • cease work for a minimum of 7 consecutive calendar days

 

Employers must:

  • use the scheme to cover their employees' wages
  • continue to pay Class 1 employer National Insurance contributions and pension contributions
  • not be paying dividends or share buybacks.
  • not make the employee redundant while they are under the scheme.
  • agree the new short-time working arrangements with their employees, make any changes to the employment contract by agreement, and notify the employee in writing. If requested, they must provide it to HMRC.

 




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