Job Support Scheme: Questions & Answers
What is the Job Support Scheme?
The Job Support Scheme is a wage subsidy scheme.
In the Job Support Scheme factsheet the government have described it as “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.”
Under the scheme, employees will need to work a minimum of 33% of their usual hours. For every hour not worked, the employer and the government will each pay one-third of the employee’s usual pay.
The factsheet provides the following example to explain how the scheme will work in practice:
- ‘X’ normally works 5 days a week and earns £350 a week. X’s company is suffering reduced sales due to Covid-19. Rather than making X redundant, the company puts X on the Job Support Scheme, working 2 days a week (40% of X’s usual hours).
- X’s employer pays X £140 for the days they work. For the time that X is not working (3 days or 60%, worth £210), X will also earn 2/3, or £140, bringing X’s total earnings to £280, 80% of their normal wage.
- The government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of normal wages) to X’s employer to support them in keeping X’s job.
What counts as a “viable” job?
The definition of a “viable” job is unclear, but The Chancellor said that the scheme will “support only viable jobs” rather than jobs that only exist because the government is currently subsidising the wages under the CJRS.
How will wages be impacted?
If an employee works one-third of their usual hours, they will receive 77% of their wages. The employer would pay 55% of the employee’s wages and the government would pay the other 22%.
How will an employer receive reimbursement?
The employer will receive reimbursement in arrears for the government contribution. This means that a claim can only be submitted in respect of a 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. However, the grant will not cover Class 1 employer NICs or pension contributions. These contributions will remain payable by the employer.
What businesses will be eligible for the scheme?
The scheme is open to all employers with a UK bank account and a UK PAYE scheme.
All small and medium-sized employers with less than 250 employees will be eligible for the scheme and will not be subject to any financial assessment tests.
Large businesses will have to meet a financial assessment test. The scheme will only be available if their turnover is lower now than before experiencing difficulties from Covid-19. The government also expects large employers not to make capital distributions such as dividends while using the scheme.
Which employees can be claimed for?
Any employees claimed for under the scheme must be on an employer’s PAYE payroll on or before 23 September 2020. A Real Time Information submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.
How long will the scheme run for?
The scheme will run for a total of six months from 1st November 2020 until the end of April 2021.
Can employees be moved in and out of the scheme?
Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short time working arrangement must cover a minimum period of seven days. Therefore, subject to short time working arrangements covering the minimum period of seven days, it does appear that it will be possible for employees to be moved in and out of the scheme.
Is there a maximum payment that the government will make?
The government contribution will be capped at £697.92 per month.
How will “usual wages” be calculated?
According to the Government factsheet, the calculations for “usual wages” will follow “a similar methodology” as for the CJRS. It also makes clear that previously furloughed employees will have their “underlying usual pay and/or hours” used to calculate wages as opposed to the amount they received on furlough. Further guidance with full details on wage calculations is expected to be produced in due course.
How will employers make claims?
It currently appears that employers to make claims online through Gov.uk from December 2020.
Will HMRC check claims?
Yes. HMRC may withhold payments, or request that repayments be made, if they find a claim to be fraudulent or based on incorrect information. Furthermore, grants under the scheme may only be used as reimbursement for wage costs actually incurred. It is vital that employers agree any new short time working arrangements with staff, make any changes to the employment contract by agreement, and notify the employee in writing. HMRC may request this agreement at a later stage.
Do employees need to have been furloughed previously to qualify?
It will not be a requirement of the Job Support Scheme for employees to have previously been furloughed under the CJRS.
If an employee is on furlough, would they be eligible for the scheme?
An employee that is furloughed would be eligible for the scheme. However, an employer would need to bring the furloughed employee back on for at least one-third of their usual hours in order to qualify for government support.
Can an employee be made redundant or put on notice of redundancy and still be claimed for under the scheme?
No. An employer will not be able to make an employee redundant or put an employee on notice of redundancy during the time that the employer is claiming the grant for that employee.
If an employer is claiming under the scheme, can the employer top-up wages?
No. The government state “expectation is that employers cannot top-up their employees’ wages above the two-thirds contribution to hours not worked at their own expense”.
How will the scheme apply to individuals on leave?
It is currently unclear how the scheme will apply to individuals on leave. We are awaiting further guidance on this.
Can an employer make a claim under the Job Retention Bonus Scheme as well as the Job Support Scheme?
Yes, as long as the employer meets the eligibility requirements for the Job Retention Bonus Scheme.
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