The Coronavirus or Covid-19 measures and restrictions are here to stay for the near future. The Government has just announced further restrictions that may well apply for the coming six months in an effort to keep us all safe from the worst impacts of the virus and to ensure that the health system isn’t overwhelmed during the winter months. Following the introduction of these measures the Government has also announced this week that there will be further grant support for employers following the end of the Furlough grant (or what is known as the CJRS) that will come to and end in October. This is an effort to save jobs across the UK as much as possible given the number of planned redundancies that have been announced by employers in recent days and weeks.
This blog post will provide some initial details and context to the new grant so that employers and current clients can better understand the impacts on themselves and what Government grant support is likely to be available to claim moving forward. It should be noted that this is far less generous than what we have previously seen and there is an onus on returning back to working some hours and also working within an viable/ongoing business.
Job Support Scheme
This new grant scheme will operate from 1 November 2020 with the intent of protecting jobs where businesses are facing lower than usual demand for their products or services across the winter months as a result of the coronavirus.
This grant scheme is currently expected to be in operation for a six month period to coincide with the expected length of time of the recently announced restrictions across the UK. Under this new grant the Government will continue to contribute towards the wages of employees who are working fewer than normal hours due to decreased demand resulting from the coronavirus.
How does this new grant work?
- Employers will pay all employees for the hours they have worked.
For usual hours not worked:
- The employer will pay one third of the usual wages capped at an amount of £697.92 a month.
- The Government will also pay one third of the usual wages caped at an amount of £697.92 a month.
The employer must pay their share of the unworked hours, as mentioned above. The employer must also pay all employer National Insurance contributions and pension contributions from their own funds.
- Employees must receive at least two-thirds of their usual wages for the hours that are not worked.
What is the eligibility criteria?
To be eligible for this new grant employees must:
- Be registered on the company PAYE payroll from 23 Sept 2020. This also means that an RTI submission must have been made to HMRC on or before 23 Sept. This cannot be backdated!
- Work at least 33% of their usual hours.
When can I claim?
This new Job Support Scheme will get underway from 1 November and the first claims for this new scheme will be able to be made during December. Grant payments will be paid on a monthly basis.
- Maximum Government grant of 22%, down from the previous furlough grant of 80%.
- Employees must work at least 33% of their usual hours.
- The employer must pay all worked hours plus 1/3 of the unworked hours.
- The Government will pay 1/3 of the unworked hours.
- The Government grant is capped at £697.92 a month, down from the previous £2,500 a month.
- This new grant will start on 1 November 2020 and run for a period of 6 months.