Government has recently announced that the Coronavirus Job Retention Scheme will soon be replaced by the upcoming COVID-19 Job Support Scheme by the end of October.

Through this scheme, the wages of employees who work lesser hours than usual due to the decreasing demand will be supported by the UK government, provided that they were on the employer’s PAYE payroll either on or before the 23rd of September 2020. However, employees must also work a minimum of 1/3 of their usual working hours. The employer will be obliged to pay the employees their normal wages for those hours worked, together with 1/3 of their unworked regular hours, whilst another 1/3 will be paid out by the Government. Essentially, employees should expect to receive 2/3 of their usual wage. The government will reimburse the employers in arrears.

As of the 1st November 2020, this scheme will be valid for 6 months and will be applicable to all UK businesses irrespective of whether these businesses have already benefitted from other schemes. It targets SMEs and larger businesses which have been struggling financially under the current circumstances. In fact, a financial impact assessment will be used to determine whether the turnover of larger businesses has been affected by the pandemic or not. Moreover, any such changes must be agreed to between the employer and employee, preferably in writing from beforehand.

The employees grant through this scheme will be calculated on a rate dependant on the employee’s hours of work and it is capped at £697.92 monthly. Pension contributions and NICs will be paid by the employer.

Employees can use this scheme when they require, subject to certain requirements such as the working arrangement that they have. This scheme applies to those employees who have not been rendered redundant or else been given the notice of redundancy during this period of applying for this scheme. This scheme applies to employers wishing to benefit from this scheme as well as the Job Retention Bonus to keep workers who have been rendered redundant on their payroll until the beginning of February 2021.

More details will be published further on.

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