By Pamela Phillips
You may remember that last month Rishi Sunak announced the new Job Support Scheme to help those businesses who continue to face reduced demand (JSS Open). The Job Support Scheme replaces the existing furlough scheme which comes to an end on 31st October.
Well, guess what? It’s all changed once again as the Chancellor has decided to make the new scheme more generous than initially designed.
So what has changed?
Under JSS Open, employees must work a minimum of 20% of their normal hours to qualify for the Job Support Scheme (originally this was due to be 33%). The employee will receive 66.67% of their normal pay for the hours not worked. This will be made up of contributions by the government and the employer.
The hours not worked will be covered:
- 5% by the employer, up to a maximum of £125 per month with the option to pay more than this if they wish.
- 62% by the government, capped at £1,541.75 per month
- 33% will be suffered by the employee by way of a reduction to their pay.
Before these changes were announced, the hours not worked were due to be covered equally by the government, the employer and the employee.
The other change is that under the scheme as originally announced, there was an expectation that employers would not top up the salary beyond what it was legally required to contribute. HMRC has now said that employers can top up salaries if they wish.
When does the new scheme start?
The Job Support scheme starts on 1 November 2020 and continues until 30 April 2021. The government will review the scheme in January 2021.
Who is eligible?
Any employee on the payroll on or before 23 September 2020 (and an RTI filed by that date) is eligible for the Job Support Scheme. They do not need to have been furloughed to be eligible
Employers must have a UK bank account and an up-to-date PAYE scheme
Employees cannot be put on redundancy notice while on the Job Support Scheme
What else do you need to know?
- New short term contracts must be drawn up and shared with employees before moving them on to the scheme.
- HMRC have advised that they will be checking claims and may ask to see copies of these contracts.
- HMRC have said they intend to notify staff that they have been included in a Job Support Scheme claim.
- The Job Support Scheme does not cover employer NIC or Pension contributions. These must be paid by the employer.
- Employers are still eligible to claim the Job Retention Bonus for employees in the Job Support Scheme if they were furloughed and are still employed on 31 January 2021.
- Employees can go on and off the scheme but each working period must cover a minimum of 7 days.
- A claim cannot be submitted until employees have been paid and an RTI return has been filed.
Where to go for further information?
If you want to know how the changes affect you, get in touch and we can talk you through what it means for you and your business.