Kickstart Scheme – What’s the fuss?
The consequences of COVID-19 and the subsequent lockdown that was put into place in March 2020 were massive for Britain (and indeed the rest of the world), but no demographic may have felt harder done by this event than those aged 16-24. With the real GDP reduction achieving heights rarely seen before, it is no surprise then to see figures published by the Office for National Statistics suggesting that unemployment rates were at 4.6% and economic inactivity rates higher than what was pre-pandemic.
Thankfully it’s not all doom and gloom as a very handy lifeline is available in the form of the Kickstart Scheme, which seeks to provide funding to employers to help them offer jobs to young adults at risk of long-term unemployment. So far the scheme’s proves itself to be the real deal, with unemployment rates falling each successive quarter.
An incentive that benefits both employer and employee, it seems that there is indeed light at the end of the tunnel.
What the employer needs to know
Perhaps the most important thing employers need to know when considering their inclusion in the Kickstart Scheme is that regardless of the company size, all employers can apply for funding. Regardless of if the business is a small company with 2 employees or a medium-sized enterprise, they can expect themselves to be eligible for the scheme.
Sole Traders and Partnerships are also included within the scope for the Kickstart scheme.
The new jobs cannot be a replacement for current employment contracts, be used as a means to reduce existing employees working hours or make them unemployed. The job role must also include basic training only.
The funding distributed to employers is another prospect to take interest in, which covers:
- 100% of the National Minimum Wage or National Living Wage depending on the age of the employee, covering 25 hours a week for 6 months
- Relevant employer National Insurance Contributions
- Automatic pension enrolment contributions
That’s a sum of £1,500 per employee available!
Employers are also given the privilege of having flexibility when deciding on employee start dates. They are allowed to spread the start date up until 31 December 2021 and will continue to receive funding until 30 June 2022 for an employee that begins work on 31 December 2021. Additional funding is also available should an employer wish to provide support to a participant in securing them a future job. Note that if you wish to pay a kickstart employee higher wages or have them do longer hours, the surplus will not be funded via the scheme.
Sounds good, how do I apply?
The process is straightforward and can be done in two ways. Employers can apply directly via GOV.UK to receive the funding and once successful can add further job placements to the kickstart agreement.
The second method requires the employer to apply via a Kickstart “Gateway” – an organisation that has existing grant agreements with the Department of Work and Pensions (DWP). The gateway will process the application to DWP on behalf of the employer and add new placements to the agreement. This essentially follows the standard hiring process format. Once the grant payment is accepted, the employer must produce job descriptions to share with DWP for use at JobCentre Plus. From there, the work coaches will identify and select candidates for interviews. The employer of course makes the final decision on the preferred candidate. There are benefits to using a gateway, namely:
- The gateway will gather information about the jobs that could be on offer;
- Sharing the above information with DWP on your behalf and;
- Pay the funding directly to you
How long does the scheme run for?
The Kickstart Scheme commenced 2 September 2020 and is expected to cease 31 December 2021, but it would not be surprising to see the scheme extended given the positive impact it has had on employment rates of the target demographic.
Let’s get started
WIM Accountants are a registered Kickstart gateway with an established list of clients utilising our gateway services. If you are interested in joining the Kickstart Scheme, we can help you.