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September 24th 2020

Coronavirus: Job Support Scheme

Chancellor Rishi Sunak has today confirmed that the existing Job Retention Scheme will end next month; and a new scheme known as the Job Support Scheme will start on 1 November and will run for six months.

To be eligible for the new scheme, employees must work at least 33% of their normal hours – the employer will pay those wages as normal. For the remaining hours not worked, the government and the employer will both pay 1/3 of those hours, which means qualifying staff earning an average wage will effectively be paid no less than about 78% of their normal full pay.

The level of support the government provides under the new scheme is effectively capped at 22% - a significant drop compared to the Job Retention Scheme.

Here are some basic illustrations of the position where an employee works either one third, or one half, of their usual hours:

Examples based on an employee working 33% or 50% of normal hours
Normal full time pay£900£900
Percentage of normal hours worked33%50%
Amount paid by employer for worked hours£300£450
Employer funds 1/3rd of hours not worked£200£150
Government funds 1/3rd of hours not worked£200£150
Total amount payable (before tax and NIC)£700£750

The government contribution is however capped at £697.92 per month per employee, so higher earners will lose out.

Employers don’t need to have claimed under the Job Retention Scheme to be eligible for the new scheme, and they can still claim the £1,000 Jobs Retention Bonus alongside this. Staff on the Job Support Scheme can’t be made redundant.

Many folk will fall through the gaps, and it is said that the government is trying to encourage people to move on and think about their next move, as the focus turns to supporting only “viable” jobs. As usual, the government has noted that further guidance will be provided in due course.

Scholes Chartered Accountants will continue to watch with interest for further updates, but feel free to contact us if we can be of help to you.

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