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02nd October 2020

The new Job Support Scheme.

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After much speculation regarding whether the Government would replace the Furlough Scheme with something else to help businesses, on 24 September the Government announced the creation of the Job Support Scheme.

The Scheme will run for six months, taking over from the Furlough Scheme with effect from 1 November. We have been waiting for further guidance, which has now, at least for the time being, been issued in the form of a factsheet from HM Treasury.

The factsheet summarises how the Scheme will operate, the key points being:

  • The employee must be on the employer's payroll on or before 23 September. This means that a Real Time Information submission notifying HMRC of payment to that employee must have been made on or before that date. <\/li>
  • An employee must work at least 33% of their usual hours. That said, the Government will, after three months, consider changing this threshold. <\/li>
  • Employees will be able to go on and off the scheme and will not have to work the same pattern each month. However, each working arrangement must cover at least seven days. <\/li>
  • Unlike under the Furlough Scheme, employees cannot be made redundant or even given notice of redundancy during the period for which their employer is claiming the grant for them.<\/li>
  • For the time they actually work, employees must be paid their normal contractual wage. <\/li>
  • For time not worked, the employee will be paid up to two-thirds of their usual wage as follows:<\/li>

    • For every hour not worked, the Government and the employer will each pay a third of the employee's usual hourly wage.<\/li>
    • The Government's contribution will be capped at £697.92 a month. <\/li>
    • The grant will not cover Class 1 employer NICs or pension contributions, which will remain payable by the employer. <\/li>
    • Calculation of "usual wages" will follow a similar method to the Furlough Scheme. <\/li>
    • Employees who have previously been furloughed will have their usual pay and\/or hours used to calculate usual wages, not their furlough pay.<\/li> <\/ul>
    • Employers must notify employees in writing of agreed working arrangements and make such documentation available to HMRC on request. <\/li>
    • Grants will be payable monthly in arrears after payment to the employee has been made and reported via an RTI return. <\/li>
    • Claims can be made online through GOV.UK from December 2020.<\/li><\/ul>
      Note there is a statement which says, "….our expectation is that employers cannot top up their employees' wages above the two-thirds contribution to hours not worked at their own expense". It’s unclear what this means. It may simply acknowledge that business cannot afford to do so, but it may be a prohibition. We shall need to wait for further guidance to see.

      As businesses discovered when the Furlough Scheme came into being, creating a new scheme such as this also creates many questions and uncertainty. Further guidance is now awaited, and it is very much hoped that it will provide as much certainty as possible, learning from the introduction of the Furlough Scheme.

      For more information on the items raised in this article please contact Nick Hall on 01604 463375 or click here<\/u><\/a> to email Nick.