Rishi Sunak, the Chancellor, announced a new Job Support Scheme which 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.
As ever, the devil is in the detail. The Government will not pay national insurance nor pension contributions and the amount of Government support is capped.
The main features are explained in this slide from my colleague, Sean Hackemann, at SAS Accounting:
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