Chancellor announces new Extended Job Support Scheme to protect jobs and support businesses
The Chancellor has announced a new scheme whereby employees who work for UK firms forced to shut because of COVID-19 restrictions, may be eligible to have two thirds of their wages paid for by the Government. This is a temporary scheme, available to eligible employers from 1 November 2020 for six months, and will be reviewed in January.
Who will be eligible?
The new scheme will differ from the previous ‘furlough’ scheme in that it specifically targets employers that will be formally or legally told to close – rather than those who choose to shut – because of the broader impact of COVID-19 restrictions. This will include businesses that are legally required to shut for a period of time as part of local or national restrictions. Employers that are required to close temporarily as a result of specific workplace outbreaks of COVID-19 are not eligible for this scheme. For example, if a childcare setting is required to close a ‘pod’ due to an incidence of COVID-19, then they will not be eligible for this scheme. However, if the Government required childcare settings to close as part of local or national restrictions, then the employers may be eligible for support through this scheme to pay the wages of their staff.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days. Additionally, an employee must have been on their employer’s PAYE payroll on or before 23 September 2020.
What does the scheme cover?
The scheme will pay for two thirds of eligible employees’ wages. Under the scheme, employers will not be required to contribute towards wages – although they may choose to do so – and are only required to cover NIC and pension contributions, a very small proportion of overall employment costs.
The whole of the grant must be used to meet employee costs. Payments will be made in arrears, reimbursing the employer for the Government’s contribution.
If an employer chooses to ‘top up’ their employees’ wages, then those employees may be able to continue to pay into the Childcare Voucher account (if applicable). With the information that is available to us at this time it is our understanding that employees will not be able to pay into Childcare Vouchers, or any other salary sacrifice scheme, when they are in receipt of support under this scheme. The Government has said that it will publish further guidance on the scheme, so we will keep this under review.
These measures will sit alongside the original Job Support Scheme – which is designed to support businesses that are facing low demand over the winter months – and the £1,000 Job Retention Bonus (JRB) which rewards those employers who keep staff who had previously been furloughed on their payroll until the end of January 2021.
However, due to the nature of the Job Support Scheme, which requires employers to pay staff work working at least one third of their usual hours, and to pay a further wages top up, many firms that are partially open – but experiencing the challenges of doing business during the pandemic – could find it harder to keep paying staff than those that are mandated to close.
Find out more
Further guidance on the scheme will be set out by HMRC but, in the meantime, information is available here.
We would encourage any individuals or employers wishing to find out what financial support they may be entitled to, to contact our Family Benefits Advice Service for free, impartial and confidential advice on Freephone 0800 028 3008 or email hello@employersforchildcare.org.
