After the announcement of the end of the Furlough scheme and the start of the Job Support Scheme, there are some details below which hopefully clarify things for you going forward if you are using, or intend to use the scheme.
The end of Furlough as we know it
The Furlough (Job Retention Scheme) scheme is ending on the 31 October 2020. All applications for this period and any previous periods not yet claimed will need to be completed by 30 November 2020.
Job Support Scheme
We are awaiting updated guidance on the mechanics of the claims process however the principles for the scheme are as follows;
- Any employee on the scheme will need to work a minimum of 20% of their usual hours, for which they will be paid in full by the employer in the usual way
- The employee will also receive on top, a further 66.67% of their normal pay for the hours they have not worked.
- The cost of this 66.67% will be split between the government and the employer.
- The employer will pay 5% of the normal earnings for the hours not worked up to a maximum of £125 per employee per month. They can pay more than this amount on a discretionary basis if they wish.
- The government will pay the remaining 61.67% of the salary for the normal hours not worked up to a maximum of £1,541.75 per month.
- Therefore, employees who earn £3,125 per month or less, are guaranteed to receive at least 73% of their normal wage.
The above details will be in place for those businesses that have not been forced to close as part of the governments enforced lockdowns. If you do have a business that has been forced to close then the employee will be provided with 66.66% of their normal wages, up to a maximum of £2,083.33.
This amount will be fully refunded by the government, after being paid by the employer. The employer can also choose to pay more than this total, however they will not be able to reclaim anything else.
How long is it running?
The scheme is running from 01 November 2020 to 30 April 2021 and we will be able to submit claims in arrears from 08 December 2020.
Neither the employee or the employer needs to have been on the existing furlough scheme to benefit from the job support scheme.
Eligibility
The main criteria are that in order to claim the employee must have been included on the payroll of your business and also still be employed by your business on the 23 September 2020
This means that any new employees from 24 September 2020 onwards will not be eligible for the scheme.
All employers who have LESS than 250 staff will not be required to take a financial impact test in order to claim.
You will only be able to claim for the employees that are working at least 20% of their hours. Any employees not working at all will not be able to be included in the claim.
We expect the mechanism for calculating base earnings to be similar to the Furlough scheme, but we will provide an update once the guidance has been published.
If you have any queries or would like to discuss anything included in the above, please don’t hesitate to get in touch.