23rd October 2020
The Job Support Scheme is changing. Full guidance is not yet available, and it may be a few weeks until released in full. But here are the initial changes to what was previously announced.
From 1st November 2020, employees need to work at least 20% of their usual hours (down from 33% under the previous scheme) to qualify for inclusion. In reality, this means that for a 5 day working week, only 1 day needs to be worked for inclusion in the scheme.
The Government contribution for the employee’s wages (for unpaid hours) is also changing. Previously the contribution was set to a maximum of 22.22% but this is increasing to 61.67%.
The employer contribution (for unpaid hours) is reducing from 22.22% to 5%.
For an employee who normally works a 40 hour week, on a weekly wage of £400 (£10.00 per hour), their wages will be as follows if they work 8 hours per week.
Pay for hours worked£10.00 x 8 hours = £80.00
Government contribution for unpaid hours £320.00 x 61.67% = £197.34
Employer contribution for unpaid hours £320.00 x 5% = £16.00
The employees Gross pay is therefore £293.34.
As the employee would normally earn £400 for a full week, there is a difference of £106.66.
The employee is therefore ‘contributing’ to this scheme by giving back 1/3 of their wages for the unpaid hours (£320.00 x 1/3 = £106.66). This is exactly the same as under the previous release of the JSS.
Please note that we still do not know how claims are to be made by the employer for the Government contribution.
All employers still remain liable for Employer National Insurance contributions and auto-enrolment pension contributions.