Covid winter rescue plan

September 25th, 2020  |  Published in Uncategorized

The current furlough scheme will end on 31 October, and the job support scheme comes into effect on 1 November, with the same aim of keeping employees working in real jobs for as long as possible. 

The job support scheme can apply to any employee who was on the payroll on 23 September 2020, so it is not restricted to employees who were furloughed at some point between March and October.

To qualify for job support, the employee must work for at least one-third of their usual hours and the employer must pay for all those hours, presumably at the employees’ usual rate, but this is not clear.

Of the employee’s “resting” hours the Government and employer must each pay one-third of the employee’s usual wage rate, see graphic. It should work out that the employer pays 55% of the employee’s wages for one-third of their normal working time.

The government’s contribution is capped at 22% of usual wages and £697.22 per month

Job support scheme graphic

The employer will bear the cost of the employer’s NI and pension contributions on all the employee’s pay.

There will be no restrictions for small and medium-sized businesses who want to use the job support scheme. However, large employers (as yet undefined), will have to show that their business has been adversely affected before they can use the job support scheme. Larger employers will also be banned from paying dividends to shareholders, or using share buy-back schemes, while they are using the job support scheme.

Employers who use the job support scheme will also be able to claim the coronavirus job retention bonus scheme for employees who qualify.

Further SEISS grants

The second SEISS grant, which closes for applications on 19 October was supposed to be the final grant for the self-employed.

But the Chancellor made it clear that a third SEISS grant will be available to cover 20% of average monthly profits for three months, for those who were eligible for the first and second SEISS grants. This will be capped at £1,875 per taxpayer. It is not clear when applications will open or close for this grant.  

In addition, a fourth SIESS grant will be made available for the three months to cover February to April 2021.

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