Employers who have been furloughing staff during lockdown will no longer be able to draw upon the Coronavirus Job Retention Scheme to pay 80% of their wages after 31 October 2020. However, as of 1st November 2020 the Government will put a substitute scheme in place. From that date if your employer only wants you to work part-time, you can get paid for some of the time that you would normally work but aren’t currently needed.
Under the government’s new Job Support Scheme, furloughed employees will have to return to work for at least a third (33%) of their normal hours. If they do this, they are entitled to at least 77% of their normal wage, but paying this wage must be shared between the government and the employer.
This means that instead of losing a whole hour’s pay for every hour you are not employed, you will lose a third. The minimum anyone put on the scheme will earn is 77% of their normal wages.
Even if you have not been on furlough your employer can use the scheme. If you have been on furlough, the calculations are based on your usual pay and hours, not your furlough pay.
To qualify for the scheme you must work at least a third of your normal hours, but you can work more.
For the hours you work you will be paid your normal wage. When you are not working, you will be paid up to two-thirds of your normal wage. There is a cap of £697.92 a month on the government’s contribution.
Patricia normally works full-time for a wage of £2,000 per month. Her employer furloughed her at the start of lockdown, but is now able to take her back to work a third (33%) of her normal hours.
Under the Job Support Scheme her employer pays for all the hours she worked, totalling £666,67 per month. This leaves a remainder of £1,333.33 to be paid.
The government pays a third of this (£444.44) and her employer pays another third (£444.44).
Patricia’s total income for the month is therefore £1,555.55. i.e.
Please remember that the government’s contribution will be capped at £697.92 per month.
When compared to the furlough scheme, the Job Support Scheme provides a comparable income for those staff that can make use of it (at least 77% versus 80% on the furlough scheme), with the potential to earn more if the employee can work more than 33% of their hours.
Staff must be able to work at least 33% of their normal hours and the employer must be able to pay them for those hours. Where this isn’t possible, the employee will in most cases be made redundant. Furthermore, this scheme offers a much worse deal for employers than the furlough scheme did. Under the furlough scheme employers could choose to pay their staff nothing at all (since 80% of their wage was paid by the government), and at most only had to pay a fifth of their normal wage to give their employees a full income.
Now, an employer using the Job Support Scheme must pay at least 33% (for work done) and also another 22% for no work done at all. For many small and medium-sized businesses, this may be a big ask. Many employers will have to face a painful choice between holding on to good employees, and having to let them go in order to protect their business.
All small and medium-sized businesses will be able to use the scheme. Some large businesses will also be able to, but must first prove that their turnover has been adversely affected by the COVID-19 pandemic. The company does not have to have previously used the furlough scheme, as any eligible business can apply.
Employers must have a UK bank account and use UK PAYE schemes. Large companies that meet the financial criteria for the scheme will not be able to pay dividends while using it.
The scheme is run through an employer’s payroll system. If your company signs up, they would claim the money from the government and pass it onto the employee via payroll.
No, not while your employer is claiming the grant for you. It could put you back onto your regular contract and give you notice that you will lose your job. Employers cannot use the scheme for people who have already be made redundant.
The winter plan did not address any of the problems with the original scheme for the self-employed. Around 1.5 million people who were newly self-employed or had limited companies at the start of the pandemic still do not qualify for help.
If you did already qualify for support, the amount people will get has been reduced. The first grant will cover the start of November 2020 to the end of January 2021 and cover 20% of average monthly trading profits; the level of the second grant has not yet been set.
The total of the first grant, which will be paid in a lump sum, is capped at £1,875. This is much less than the current grant available to the self-employed, which is worth 70% of profits and capped at £6,570.
The scheme will run for six months, from 1st November 2020 until 30th April 2021. At this time no-one knows whether there will be a replacement, or if a replacement would even be necessary when the job support scheme is due to end.