New Job Support Scheme FAQs

On 24 September 2020, Chancellor Rishi Sunak announced a new Job Support Scheme would be introduced to replace the Job Retention Scheme, which comes to an end of 31 October 2020.

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New Job Support Scheme FAQs

The stated aim of the new scheme was to support wages and allow employers the option of keeping people in work on shorter hours, rather than make them redundant.  It formed part of the Chancellor’s Winter Economy Plan. The Job Support Scheme was scheduled to begin on 1 November 2020, the day after the Job Retention of “Furlough”  Scheme comes to an end, and is currently scheduled to last 6 months until 30 April 2021. If we have learned nothing else in the current pandemic however it is that the situation is extremely fluid if not uncertain.  The announcement on Friday 9 October 2020 to add an extension to this Jobs Support Scheme is therefore perhaps not altogether surprising. We have set out below our current understanding of these additional charges to the scheme.

So what was the original scheme?

Under the original Job Support Scheme, the government offered to contribute one-third of the shortfall of wages (capped at £697.72 per month) for employees who were working reduced hours, but working at least one-third of their normal, pre furlough, hours.  The employer would contribute a further one-third of the shortfall, and the employee would forego the final third.  All so-called small and medium-sized businesses will automatically qualify for the scheme, but large businesses will have to show their turnover has fallen due to COVID-19 in order to access the scheme. This will be demonstrated by meeting a financial assistance test to show a drop in turnover.

And what are these new changes?

The Government will now support eligible businesses by paying two-thirds of each employee’s salary so 67% up to a maximum of £2,100 a month.  This scheme will be open from 1 November 2020 to the end of April 2021.  Employers will be able to make a claim online through Gov.uk from December  2020.  Claims will be payable in arrears on a monthly basis.

Who is eligible to participate in this scheme?

From 1 November 2020 any employer required to close their premises due to local or national coronavirus restrictions.  To be eligible businesses must be subject to restrictions and employees must be off work for a minimum of seven consecutive days. This includes businesses that are forced to close their premises but , for example, continue to provide only delivery and collections services or offer food and drink outdoors.

But what happens if I am closed down beforehand?

Out with the normal benefits system,  employees of firms that have been legally closed in the period before 1 November are eligible for the Coronavirus  Job Retention Scheme but don’t forget that this too is subject to eligibility requirements.  You can generally only claim for employees previously furloughed before 30 June 2020 and you submitted a claim for by  31 July 2020.  Employees returning from statutory parental leave are excluded.  Also the number of employees you can claim for in any period starting 1 July 2020 cannot exceed the maximum number of employees you claimed for in any period ending 30 June 2020.  Specific rules apply again to those returning from statutory parental leave or returning military reservists.

It there anything else employers should be aware of?

Employers participating in this scheme will need to pay national insurance and pension contributions.   No other employer contribution is required for this extension to the scheme.  This extension to the scheme will also sit alongside the original job support scheme where Government will pay up to 22% of the wages for workers in “viable“ jobs on reduced hours.  Is also sits alongside the £1000 job retention bonus which is paid per worker and is designed to encourage employers to keep staff on payroll until at least January 2021.

How long will the scheme last?

The scheme will begin on 1 November 2020 and will be available for six months, with a review in January.   In line with the rest of the Job Support Scheme, payments will be made in arears, via an HMRC claims service that will be available from early December.

Please note that this advice is correct as of 12 October 2020.  We anticipate that this advice may change as the guidance is updated and we will provide updated advice as and when this becomes available.  Please contact us at employment@keebles.com if you require any further guidance and assistance.

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