The new Job Support Scheme

What is it?

• The Job Support Scheme is designed to protect viable jobs in businesses who are
facing lower demand over the winter months due to Covid-19, to help keep their
employees attached to the workforce. The company will continue to pay its
employee for time worked, but the burden of hours not worked will be split
between the employer and the Government (through wage support) and the
employee (through a wage reduction), and the employee will keep their job.
• 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.
• Employers using the Job Support Scheme will also be able to claim the Job
Retention Bonus if they meet the eligibility criteria.
• The scheme will open on 1 November 2020 and run for 6 months, until April 2021.
Further guidance will be published shortly.

Who is eligible?

I. 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.
• Large businesses will have to meet a financial assessment test, so the scheme is only
available to those whose turnover is lower now than before experiencing difficulties
from Covid-19. There will be no financial assessment test for small and medium
enterprises (SMEs).
• Our expectation is that large employers using the Job Support Scheme will not be
making capital distributions, such as dividend payments or share buybacks, whilst
accessing the grant. Further details will be set out in guidance.

II. Employees
• Employees must be on an employer’s PAYE payroll on or before 23 September

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.
• Employees will be able to cycle on and off the scheme and do not have to be
working the same pattern each month, but each short-time working arrangement
must cover a minimum period of seven days.

What does the grant cover?

• 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.
• “Usual wages” calculations will follow a similar methodology as for the Coronavirus
Job Retention Scheme. Full details will be set out in guidance shortly. Employees
who have previously been furloughed, will have their underlying usual pay and/or
hours used to calculate usual wages, not the amount they were paid whilst on
furlough.
• Employers must pay employees their contracted wages for hours worked, and the
Government and employer contributions for hours not worked. Our expectation is
that employers cannot top up their employees’ wages above the two-thirds
contribution to hours not worked at their own expense.

What does it mean to be on reduced hours?

• 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 can I claim?

• The scheme will be open from 1 November 2020 to the end of April 2021 and claims will be able to be made from December 2020. They will be paid on a monthly basis.
• Grants will be payable in arrears meaning that a claim can only be submitted in
respect of a given pay period, after payment to the employee has been made and
that payment has been reported to HMRC via an RTI return.

HMRC checks

• HMRC will check claims. Payments may be withheld or need to be paid back if a
claim is found to be fraudulent or based on incorrect information. Grants can only
be used as reimbursement for wage costs actually incurred.
• Employers must agree the new short-time working arrangements with their staff,
make any changes to the employment contract by agreement, and notify the
employee in writing. This agreement must be made available to HMRC on request.
• Our intention is that employees will be informed by HMRC directly of full details of
the claim.

Examples

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