Last week, Chancellor Rishi Sunak announced that the ‘Job Retention Scheme’ that has carried many businesses and teams during the pandemic, is changing to the ‘Job Support Scheme’. This provides some additional support as the previous 6 month plan (AKA Furlough Scheme) comes to an end on 31 October 2020. What changes are being made? The Chancellor said that “Furlough was the right policy at the time we introduced it…but as the economy reopens, it is fundamentally wrong to hold people in jobs that only exist inside the furlough”.
The announcement explained how “viable jobs” will receive support over the next six months. Viable jobs, meaning jobs that exist outside of the Furlough Scheme. This will encourage a return to work phased approach for many businesses and teams. As the Job Retention Scheme ends on 31st October, The Job Support Scheme will therefore start from 1st November and will end in April 2021. Key takeaways
Employees must be working at least one third (33%) of their normal hours.
The government and the employer will each pay a third of this, which will then increase the employee’s wages to at least 77% of their normal monthly pay.
All SME's will be eligible, which is good news for Dental Practices.
All employers can apply, regardless of whether they had used the furlough scheme so long as they were on the payroll before 23rd September 2020
There is a 7 day minimum working period, which means that Dental Practices have more flexibility when planning the monthly rota’s as it could see a fair and balanced return of some team members, support nursing staff around family commitments and/or shielding, sickness, annual leave and so on.
The ‘Job Support Scheme’ is capped at £697.92 per employee.
Managing Payroll under the new scheme We are no mathematicians, and we don’t expect you to be either. If like us, you are scratching your heads with how we are to calculate these earnings under the new Job Support Scheme and would like to know what the percentages actually mean, I hope this breakdown offers some insight. We know that employees need to work at least one third of their normal hours (33%), and this must be paid for as normal by their employer. They can of course work more, but no less to be eligible under this scheme. *The calculations would then change.
A Third of the remaining 66% of the employees hours and pay, is divided by the government and the employer (22%).
The government’s contribution is therefore 22% of their normal wages and the employer will pay a total of 55%. (33% the employee worked plus the 22%). This totals 77% of the normal salary.
The grant will vary as it will be calculated based on the employee's usual salary, capped at £697.92 per month.
Coronavirus Job Retention Bonus Keeping your employees in work and on the scheme could reward you with a £1,000 Job Retention Bonus at the end of January 2021. You must be able to provide all records of working hours and pay during periods of furlough. More details can be found on the Government Website. We are still waiting for further details, but one thing that has been made quite clear, is that employers will not be able to issue redundancy notices to those on the new Job Support Scheme.
Additional updates from the Chancellor ‘Pay as You Grow scheme for businesses’
Increased flexibility to pay back loans for those that took government loans during the crisis. This welcomes and extension on loan repayments from 6 to 10 years which will reduce the value of payments.
As well as the Job Support Scheme, there is also the Coronavirus Job Retention Bonus which is available from 31st January
If you would like to discuss what this means for you, your team or your practice, please do not hesitate to get in touch as I am very happy to discuss this further with you.
I hope that this is a bitesize breakdown for you, but for further information, I would like to direct you to the Government Website.
This offers some more reassurance and security for many, it's great to see how this will benefit our dental colleagues and we thank Rishi Sunak for his efforts in keeping us SME’s going!
Best wishes to you all
Diamond Dental Staff