The furlough scheme will come to an end on 31 October 2020 and the government has announced that, following that date, it will introduce a new Job Support Scheme under which it will support the wages of people in work.
The intention behind this is to keep people in work on shorter hours rather than making them redundant. The scheme will be open for six months from November.
We have set out some key points to the scheme below:
- Employees will need to work a minimum of 33% of their usual hours. For every hour not worked the employer and the government will each pay one third of the employee’s usual pay, and the government contribution will be capped at £697.92 per month.
- The employer will be reimbursed in arrears for the government contribution.
- The employee must not be on a redundancy notice.
- The scheme is open to all employers with a UK bank account and a UK PAYE scheme. All Small and Medium-Sized Enterprises (SMEs) will be eligible; large businesses will be required to demonstrate that their business has been adversely affected by COVID-19, and the government expects that large employers will not be making capital distributions (such as dividends), while using the scheme.
- To be eligible, employees must have been on the employer’s Real Time Information submission on or before 23 September 2020.
- The minimum 33% threshold hours for which an employee must work may be increased in months 4-6 of the scheme.
- Working patterns can vary, but each short-time working arrangement must cover a minimum period of seven days.
- The government’s grant will not cover Class 1 employer NIC or pension contributions, although they remain payable by the employer.
- ‘Usual wages’ will follow a “similar” methodology to the Coronavirus Job Retention Scheme.
The government factsheet can be found here: https://www.gov.uk/government/publications/job-support-scheme