12 October 2020 - Reading time: 6 Minutes
The government has announced the launch of policies and measures to protect jobs where businesses are facing lower demand over the winter months due to the Covid-19 pandemic.
The new Job Support Scheme will replace the Coronavirus Job Retention Scheme (CJRS), known as furlough, and will be available from 1st November 2020.
The Job Support Scheme aims to protect the jobs of millions of people returning to work. It accompanies other support measures including the extension of the VAT cut (from 20% to 5%) for the hospitality and tourism sectors and initiatives to help businesses repaying government-backed loans.
Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
Employers will continue to pay the wages for the hours their staff work. However, for the hours not worked, the government and the employer will each pay one third of their usual wages (capped at £697.92 per month). Employers will need to meet their share of the pay for unworked hours, and all employer National Insurance contributions and statutory pension contributions, from their own funds. This means that employees will receive at least two thirds of their usual wages for the hours not worked.
The scheme opens in November and employers will be able to claim in December with grants paid on a monthly basis. The Scheme will be open to employers across the UK even if they have not previously applied under the CJRS which ends on 31st October 2020.
To be eligible, employees must be registered on PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 23 September 2020.
Employees must also work at least 33% of their usual hours. The government will consider whether to increase the minimum hours threshold after the first three months of the scheme.
You can view full eligibility criteria on the official government factsheet here.
The Job Support Scheme will operate in addition to the Job Retention Bonus. Companies can benefit from both schemes if necessary, to help protect jobs.
In case you missed it, the Job Retention Bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the scheme, and who remains continuously employed through to 31 January 2021.
All employers are eligible for the scheme, but eligible employees must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021. Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021. You can find detailed information about the scheme here.
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