UPDATED 22nd October 2020. The Chancellor today announced a change to the Job Support Scheme. The Scheme will now be more generous than previously advertised. Read below for more information.
What is the Job Support Scheme?
The Job Support Scheme (Open) is designed for employers that have suffered a loss in revenue due to Covid-19 but have NOT been forced to close by any of the 4 devolved Governments. Note, only employers with more than 250 employers will have to justify this decrease by completing a financial impact test.
The Job Support Scheme will now allow employers to reduce an employees working hours to 20% of the normal contractual hours. For instance, if an employee is contracted to work 40 hours a week, then can now work as little as 8 hours a week and still benefit from this scheme.
The Government will now pay 61.67% of non-worked contractual hours (capped at £1,541.75 per month). The Employer picking up 5% of non-worked hours (capped at £125 per month) and the 20% that the employee is working for them. The Employer will also be eligible for the Job Retention Bonus of £1k (providing them meet the criteria).
This scheme will run for 6 months from 1 November 2020.
Who is eligible for the Job Support Scheme?
The eligibility criteria are:
- All employers with a UK bank account and UK PAYE scheme.
- No claim needs to have been made under the previous furlough (Coronavirus Job Retention Scheme).
- Fully public funded organisations aren’t expected to use the scheme but part publicly funded organisations can if their private revenue has been disrupted.
- Large organisations can join subject to a financial impact test (eg revenue must have declined or stayed flat due to Covid). SME’s and charities will not face this impact test.
- Employees must have been on payroll between 6 April 2019 and 23 September 2020.
- Employees must work at least 20% of their normal contractual hours. Training can count towards the working hours.
- Zero hours and agency workers are eligible.
How does this compare to the previously announced Job Support Scheme?
The above image details the previously announced scheme. The main changes are that the minimum time worked drops from 33% to 20% and the employer picks up a lower proportion of the tab than they would have done under the previously announced Job Support Scheme.
Job support scheme (closed)
If an employer has to close due to Covid-19 restrictions, then the Government will pay 2/3rds of the normal wage up to a limit of £2,100 per month. This can be claimed for a minimum period of 7 consecutive days.
No redundancies whilst the Job support scheme is running
One other element of the scheme is you cannot issue a notice of redundancy whilst receiving job support. So anyone planning to utilise the scheme must be sure that they will be able to afford the wages for the duration of the scheme.
Other support measures include:
- Deferred VAT is now repayable over installements without interest and not in a lump sum.
- Self assessment liabilities due in Jan 2021 can be repaid over 12 months.
- VAT will be reduced from 5% until 31st March 2021 for the Hospitality and Tourism Industries.
- CBILS Government guarantees will be extended to 10 years.
- Bounce Back Loans will be extended from 6 to 10 years with payment holidays of up to 6 months with no impact on credit ratings.
Need help understanding the Job Support Scheme?
Contact Rob on 07494 161169 or Nicci on 07908 875146 for further information. We can help you plan your workforce over the winter months and put these contractual changes in writing (a legal requirement). Click here for further information about our services.