Job Support Scheme Key Facts
24 September 2020, Charities, Companies, Creative Industries, Employer, General, Sole Traders
How does the Job Support Scheme work?
The Job Support Scheme is designed to protect viable jobs in businesses facing lower demand over the winter months due to Covid-19. Employers will receive support from the UK Government to help keep their employees on payroll after the furlough scheme is withdrawn.
The company will continue to pay any employees on reduced hours for time they work, but some of hours not worked will be split three ways between the
-
- Employer through additional pay
- Government through wage support and
- Employee through a wage reduction.
The whole point of the scheme is for employees to keep their job.
This article was correct at the time of posting (24th September), see the separate article following the Job Support Scheme update on 22nd October 2020.
The UK Government will issue further guidance shortly, but for the moment, here is what we know.
Is the scheme linked to furlough funding?
The Job Support Scheme follows the closure of the Coronavirus Job Retention Scheme, but there is no direct link between the two schemes. Neither the employer nor the employee needs to have previously been part of the Coronavirus Job Retention Scheme.
Whether or not you have furloughed staff, you may be eligible for the Job Support Scheme.
Employer eligibility
All employers with a UK bank account and UK PAYE schemes can claim the grant.
Large businesses will have to meet a financial assessment test, so the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19. Large employers using the Job Support Scheme must not make capital distributions, such as dividend payments or share buybacks, whilst accessing the grant. Further details will be set out in guidance.
There will be no financial assessment test for small and medium enterprises (SMEs). This means SMEs do not have to prove reduced turnover due to the Coronavirus.
What about new employees?
Employees must be on an employer’s PAYE payroll and reported to HMRC on or before 23rd September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23rd September 2020.
Example
- Davina started employment on 20th September 2020. The RTI report was submitted to HMRC by the employer on 21st September 2020 along with all the other staff wages. If Davina’s hours are reduced following the 1st November she would be eligible for the Job Support Scheme
- David started employment on 1st September 2020. The RTI report was submitted to HMRC on 24th September. As David’s first RTI report was not submitted until after 23rd September he will not be eligible for the Job Support Scheme even if his hours are reduced.
What is the minimum an employee must work?
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. Each short-time working arrangement must cover a minimum period of seven days.
What is the maximum grant?
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. See the table below for calculations based on this maximum grant.
Grant payments will be made in arrears, reimbursing the employer for the Government’s contribution.
Does the Job Support Scheme cover NIC or pension contributions?
The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
How are usual wages calculated?
“Usual wages” calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme. Full details will be set out in guidance from HMRC shortly. Employees who have previously been furloughed, will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough.
Employers must pay employees their contracted wages for hours worked, and the Government and employer contributions for hours not worked.
Can I top up my employee wages?
Employers will not be able to pay more than the total Employee Earnings % shown in the table below. If you want to pay your employee more than this amount you will not be eligible for the Job Support Scheme.
What does it mean to be on reduced hours?
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.
Can I make employee redundant while they are on the Job Support Scheme?
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.
How long will the Job Support Scheme Last?
The Job Support Scheme will open on 1st November 2020. It is currently scheduled to cease on 30th April 2021.
How do I make a claim?
Employers will be able to make a claim online through Gov.uk from December 2020. Claims will be processed and paid on a monthly basis.
Grants will be payable in arrears meaning 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 an RTI return.
HMRC checks
HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred.
Do I need to tell my employee if they are on the Job Support Scheme?
Employers must
- agree any new reduced hours working arrangements with their staff
- make any changes to the employment contract by agreement, and
- notify the employee in writing.
This agreement must be made available to HMRC on request.
The table below was correct at the time of posting (24th September), but is no longer valid following the Job Support Scheme update on 22nd October 2020.
Monthly Pay Job Support Scheme Example
| Full Monthly Wage | £3,125.01 | £3,489.60 | £4,187.52 | £5,234.40 | £6,979.20 |
| Reduced Hours % | 33% | 40% | 50% | 60% | 70% |
| Reduced Wages before Job Support Scheme | £1,031.25 | £1,395.84 | £2,093.76 | £3,140.64 | £4,885.44 |
| Government wage support | £697.92 | £697.92 | £697.92 | £697.92 | £697.92 |
| Employer additional pay | £697.92 | £697.92 | £697.92 | £697.92 | £697.92 |
| Employee wage reduction | £697.92 | £697.92 | £697.92 | £697.92 | £697.92 |
| Total wage after Job Support Scheme | £2,427.09 | £2,791.68 | £3,489.60 | £4,536.48 | £6,281.28 |
| Gov Grant (% of normal wages) | 22% | 20% | 17% | 13% | 10% |
| Employer top up | 22% | 20% | 17% | 13% | 10% |
| Employee Earnings (% of normal) | 78% | 80% | 83% | 87% | 90% |
| Employer Cost (% normal wages) | 55% | 60% | 67% | 73% | 80% |
| Total Gross Pay | £2,427.09 | £2,791.68 | £3,489.60 | £4,536.48 | £6,281.28 |
