Although different, the aim of both schemes is to help employers keep staff in their roles even if there is less demand for them to do these roles which has caused confusion amongst employers. Both schemes work through the Government partially funding employee wages, subject to a cap, therefore providing an alternative for companies to explore rather than lay-offs and full redundancies. While the Job Retention Scheme was initially funded entirely by the Government, this changed in August to now be part-funded by employers. The first glaring difference is that from day one, the Job Support Scheme will be funded by both the Government and employers.
It is also important to remember that both are completely optional for your client and they did not have to have claimed under the Job Retention Scheme to benefit from the new scheme. There was and is no expectation upon your client to make use of either of the schemes and it is ultimately down to them how they respond to the challenges of the coronavirus pandemic.
To further understand the differences, it is crucial to understand why the Job Support Scheme has been announced by the Government, and why they have not decided to simply extend the Job Retention Scheme despite numerous calls for them to do so. The Chancellor, Rishi Sunak, did provide some answers to this in his speech, outlining that his aim is to now support roles that can continue but simply need some further assistance – the new scheme is there to help employers who are able to provide a minimum number of hours.
The Job Support Scheme will require employees to work at least one-third of their normal hours to be eligible. This is a vast difference from the current rules of the Job Retention Scheme, as here employees can either not work at all or work reduced hours of any duration. Under the Job Support Scheme, the Government will only fund a third of employee wages attributable to the hours the employee does not work, which again differs from the Job Retention Scheme. The result is that the amount of government funding on offer is significantly less.
When it was originally introduced, the Job Retention Scheme was open to any business, regardless of size or sector. The Job Support Scheme is a little different. While any small to medium-sized enterprise (SME) will be able to make use of it, larger businesses will only be able to do so if they can show that their turnover has dropped. This shows that the Government is intending to be stricter with whom they allow to make claims under the scheme – likely due to the immense cost of the Job Retention Scheme.
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