Chancellor Rishi Sunak has announced the new Jobs Support Scheme which runs for 6 months from 1 November 2020.

This does not replace the Coronavirus Job Retention Scheme (JRS) rather it is a new scheme from the government supporting the wages of people in work. The idea is that this allows employers to keep employees employed on shorter hours rather than being forced to make the difficult decision to make people redundant.

To qualify for the scheme, employees will need to work at least one-third of their usual hours which is paid by the employer. Pay will then be topped up by both the employer and the government - so the employer and the government will each pay one third of the employee’s usual pay. The government contribution will be capped at £697.92 per month. The government will not cover Class 1 employer NIC or pension contributions, which remain payable by the employer. Employees will therefore receive up to 77% of their normal salary.

All SMEs are eligible and larger businesses where turnover has been impacted by Covid. Interestingly this new scheme applies to all employees even if they were not previously furloughed but they must not be on a redundancy notice. Employees must however have been on the employer's Real Time Information submission on or before 23 September 2020.

The key points are:

The employee must work a third of their normal hours and be paid as normal for those by their employer

 The employer and the government will each pay 1/3 of unworked hours, leaving the employee to absorb the balance

The government’s contribution is subject to a cap of £697.92 per month

“Usual wages” calculations will follow a similar methodology as for the CJRS

 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

 An employee cannot be made redundant or put on notice of redundancy whilst their employer is claiming the grant for them

 All small and medium businesses are eligible but large businesses are only eligible where turnover has fallen through the covid crisis

The scheme will operate for 6 months from 1st November 2020 

As ever, the complexity is in the detail. The fact sheet linked below helps but more guidance is expected. 

https://www.gov.uk/government/publications/job-support-scheme