A recent announcement from Chancellor Rishi Sunak unveiled plans to help young people get back to work. The Kickstart Scheme aims to subsidise businesses hiring young people. This mini-guide will take you through everything you need to know about the scheme.
What is the Kickstart Scheme?
Originally mentioned back in the July mini-budget, the scheme aims to get young people on Universal Credit back into work. In July, there were almost 538,000 young people on Universal Credit, which is a rise of around a quarter of a million since March.
The Kickstart Scheme is estimated to cost £2 billion and is designed to last for six months. Businesses who sign up for the scheme will be given £1,500 to help set up a training programme for the new employees.
How Does the Kickstart Scheme Work?
The Government pays 100% of the National Minimum Wage, National Insurance and pensions for young people between the ages of 16-24. This is provided they have a quality job/training placement with a minimum of 25 hours per week.
Rishi Sunak said, “This isn’t just about kickstarting our country’s economy – it is an opportunity to kickstart the careers of thousands of young people who could otherwise be left behind as a result of the pandemic.”
The scheme will be delivered by the Department for Work and Pensions (DWP) and will be open until December 2021. At the moment, it’s unclear whether it will be extended beyond that.
Who is Eligible?
Any business of any size can apply for the funding, provided that the jobs they create are new and are not replacing existing vacancies. The placements must also not cause any existing employees or contractors to lose their jobs.
The roles you create must be for a minimum of 25 hours a week for six months, and must not require people to have extensive training before they begin the placement. However, those applying to the scheme will need to outline how they will develop the employee’s skills and experience.
Advertising the new roles
Young people will be referred for new jobs through the Jobcentre Plus network. If you are planning to sign up for the Kickstart Scheme as an employer, the DWP has warned companies not to advertise roles. These roles must be made available through Jobcentre Plus rather than advertised on Indeed or Totaljobs.
The Minimum Number of Placements
One of the rules for this scheme is that your application must be for a minimum of 30 placements. This rule has put some smaller businesses off, but there is a way around it.
If like most small businesses, you can’t offer 30 placements, you can still partner with other organisations to reach the minimum number. That means someone must apply on behalf of a group of businesses.
This also means that the person applying on behalf of a group of businesses will receive a bit of extra help. They will receive £300 to support the administrative costs of managing the application for everyone.
The downside to this is that there are likely to be delays as the Government must vet each individual business within the group. Mike Cherry, the national chair of the Federation of Small Businesses said, “The time it will take to hire these 30 employees across several small firms could take months and result in increased costs for small firms at a time when they need our support the most.”
Managing payroll for the Kickstart Scheme
The Kickstart grant will be paid to you after your new employee has been enrolled on your payroll and is being paid through PAYE. You will need to report the new employee’s pay through the Real-Time Information method of reporting PAYE.
This grant will be taxed but it will be off-set as employment costs. For those who need help managing payroll, hiring an accountant such as BrooksCity is advised, especially to help you navigate such a new employment scheme.