General Summary of the Update
- The Job Support Scheme will be open from 1 November 2020 and run for 6 months, until 30 April 2021. It will be reviewed in January.
- The employer will have to pay the money to the employee up front and can submit claims for reimbursement from 8 December 2020.
- Neither the employer nor the employee needs to have benefitted from the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme.
- Employees must have been on the employer's PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020 (i.e. an RTI payment submission must have been made for them within this window).
- Employees can be on any type of contract, including zero hours or temporary contracts.
- Employers will be able to top up employee wages above the level of minimum contributions at their own expense if they wish. This is a change from the previous announcement which said that you should not do this.
- Employers cannot claim under either scheme for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period. The guidance does not expressly say what happens during consultation but indicates that you can use either scheme to cover a consultation period.
- The Job Support Scheme grant will not cover National Insurance contributions (NICs) or pension contributions. These contributions remain payable by the employer.
- Employers must deduct and pay to HMRC income tax and employee NICs on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant.
- Employers and Employees must also still pay pension contributions in accordance with the applicable pension scheme terms, unless the employee has opted out or stopped saving into their pension. If applicable Student Loan deductions and the Apprenticeship Levy must also still be paid.
- Employers claiming the Job Support Scheme may still claim the Job Retention Bonus in respect of the same employee if they are eligible.
The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked.
In respect of the unworked hours:
- the employee will receive 61.67% from the government up to a maximum of £1,541.75 per month.
- the employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish.
- the employee agrees to waive the remaining 33%
This means that employees will continue to receive at least 73% of their normal wages (based on them working 20% of usual hours), where they earn £3,125 a month or less.
To be eligible for the grant, employers must have reached written agreement with their employee (or reached written collective agreement with a trade union where the relevant terms are determined by collective agreement) that they have been offered a temporary working agreement.
The agreement must be available for view by HMRC on request for up to 5 years.
This temporary working agreement must cover at least seven consecutive days.
An employer with 250 or more employees on 23 September 2020 must undertake a Financial Impact Test (essentially comparing VAT return submissions) demonstrating their turnover has remained equal or fallen to show they have been adversely affected due to coronavirus.
The government expects that large employers and their corporate groups using the scheme will not make capital distributions (i.e. shareholder dividends) whilst claiming the Job Support Scheme grant.
Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish.
Employees may also be entitled to additional financial support, including Universal Credit.
Employers should discuss with their staff and make any changes to their employment contract by written agreement. This must be available for inspection for 5 years.
Organisations that have staff costs that are fully publicly funded (even if they are not in the public sector), should use that money to continue paying their staff, and not use the Job Support Scheme.