CORONAVIRUS UPDATE
Job Support Scheme
What Is It?
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 in 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, the Government and the employee.
The Government will pay a third of 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.
Who Is Eligible – Employers?
All employers with a UK bank account and UK PAYE schemes can claim the grant.
Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.
Who Is Eligible – Employees?
Employees must be on an employer’s PAYE payroll on or before 23 September 2020.
This means a RTI submission notifying payment to that employee must have been made on or before 23 September 2020.
In order to support viable jobs, for the first three months of the scheme the employee must work at least 33% of their usual hours.
After 3 months, the Government will consider whether to increase this minimum hours threshold.
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.
What Does The Grant Cover?
For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee.
The Government contribution will be capped at £697.92 a month.
The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
What Does Reduced Hours Mean?
The employee must be working at least 33% of their usual hours.
For the time worked, employees must be paid their normal contracted wage.
For time not worked, the employee will be paid up to two-thirds of their usual wage.
Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.
Example
- 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.
The MDH team are here to support you
If the above will have an impact on your of your business, please book in a 30 minute call with Michael or Natalie to discuss.
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