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The New Job Support Scheme

With the virus spreading and more local lockdowns, business viability is adversely affected. The Chancellor, Rishi Sunak added to the measures taken in the 2020 Budget , payment holiday and The Chancellors Summer Statement in an effort to provide more support to local businesses.

Here is a 2 minute summary of the Chancellor, Rishi Sunak’s New Job Support Scheme:

The new job support scheme – what is it?

The scheme has been set up to protect employees currently in work, by supporting employers who are facing depressing demand during the winter months, to pay their wages. It replaces the Coronavirus Job Retention Scheme (CJRS), from November 2020 to April 2021.

The company will continue to pay it’s employees for the time worked, but pay for the hours worked will be split between the Government and the employer, through wage support.

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.

The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. So emplyees earn a minimum of 77% of their normal wages.

The scheme will open on 1 November 2020 and run for 6 months, until April 2021

Employers on the Job Support Scheme canl also claim the Job
Retention Bonus
, providing they meet the eligibility criteria.

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.

EMPLOYEES
Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC 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.

What is covered?

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.

Grant payments will be made in arrears, reimbursing the employer for the
Government’s contribution. The grant will not cover Class 1 employer NICs or
pension contributions, although these contributions will remain payable by the
employer.

Employers must pay employees their contracted wages for hours worked, and the
Government and employer contributions for hours not worked.

Employees must be on an employer’s PAYE payroll on or before 23 September 2020, in order to claim.

What does reduced hours actually 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.

How to claim?

The 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. They will be paid on a monthly basis

Example

• Anita normally works 5 days a week and earns £350 a week. Her company is
suffering reduced sales due to coronavirus. Rather than making Anita redundant, the
company puts Anita on the Job Support Scheme, working 2 days a week (40% of her
usual hours).
• Her employer pays Anita £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 Anita’s employer to support them in keeping Anita’s
job.

If you require any additional information regarding The New Job Support Scheme, please contact us at enquiries@pennyhills.com or call us on 0208 064 0969.

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