Job Support Scheme

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 scheme will open on 1 November 2020 and run for 6 months.

The company will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, 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.

Key Points:

  • In order to be eligible, an employee must work at least 33% of their normal working hours for which the employer must pay them 33% of their normal wage.
  • For any normal hours not worked, the employer will pay a third and the Government will pay a third and the employee will forego the remaining third.
  • The Government contribution will be capped at £697.92 a month. That makes the scheme suitable for employees who earn up to £3,140.64 per month.
  • The new short-time working arrangements should be agreed in writing

One advantage to using this scheme is that Employers who continue to employee staff using the Job Support Scheme will also be able to claim the £1k Job Retention Bonus if they meet the eligibility criteria.

Example:

  • 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.

The full government document can be downloaded here

 

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