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What is the Kickstart Scheme?
- AuthorEmployment Team
It was announced on 25th January 2021 that employers are no longer required to have a minimum of thirty placement opportunities to be able to use the Department for Work and Pensions application process.
In an attempt to boost the creation of jobs in the UK, the Chancellor announced the introduction of the Kickstart Scheme which is due to commence in November 2020. This scheme is designed to create new jobs for people aged between 16 and 24 who are currently on Universal Credit and at risk of long-term unemployment. This should not to be confused with an apprenticeship, which is an entirely different framework; here our Employment Law team explains more about the Kickstart Scheme, what the placement should include and employers should apply.
How does the Kickstart Scheme work?
The Kickstart Scheme is available in England, Scotland and Wales and gives employers the opportunity of creating six month job placements for those who meet the criteria outlined above, with the aim of supporting them to develop the necessary skills and experience such as attendance, timekeeping, teamwork, career advice, setting goals, CV and interview preparation, which in turn will increase their prospects of securing long term employment, post placement.
The Government will fund all valid placements including:
- 100% of the relevant National Minimum Wage rate for 25 hours a week;
- National Insurance contributions;
- employer minimum automatic enrolment contributions;
- £1,500 per placement for setup costs, support, and training; and
- where an employer is applying on behalf of a group of employers, they can also receive £300 for each job placement to support with the associated administrative costs of bringing the group of employers together.
What constitutes a valid placement under the Kickstart Scheme?
A valid placement must:
- not be an existing or a planned vacancy, as this goes against the purpose of the scheme of creating new jobs;
- not cause existing employees to lose employment;
- be for a minimum of six months,
- be for at least 25 hours per week;
- pay the relevant National Minimum Wage rate to the individual; and
- not require extensive training.
Who can apply for the Kickstart Scheme?
Any organisation, regardless of size, can apply for funding however the employer must apply for at least thirty places. In situations where you are not in a position to offer thirty placements, you can instead:
- find an existing Kickstart gateway, such as the local authority, a chamber of commerce or a trade body; or
- join a group of other employers, and nominate a representative of the group. To qualify as a representative, the individual must have:
- experience in managing partnership agreements with third parties; and
- strong financial and authoritative processes to manage the applications.
The Government is entitled to carry out a suitability assessment on anyone seeking to be a representative. If the representative is approved they will be responsible for:
- gathering information from those within the group about the job placement’s each employer would like to offer;
- using the information collated to submit online applications on behalf of the group; and
- passing on relevant payments to the employers.
Applying for the Kickstart Scheme
To apply for the Kickstart Scheme the employer or representative will need to:
- offer at least thirty job placements;
- disclose details of the job placements and location;
- show that the placements are new vacancies. This could include a summary of any changes to the workforce during the last six months;
- provide details of the support that will be given to those that are offered a placement as well as an explanation as to why the Kickstart Scheme is necessary and how the placements will increase employability of participants; and
- give relevant business details.
As soon as the application has been submitted, an assigned panel will check that it meets all of the criteria and will write to the employer or representative within one month to confirm the outcome. Feedback will be provided where an application is unsuccessful and whilst there is no right to appeal a decision, there is nothing to stop the employer or representative from reapplying as many times as they like.
Recruiting a participant under the Kickstart Scheme
If approved, the employer or representative will receive a grant agreement outlining what the company has agreed to provide to the participants and the amount of funding that will be given, which must be signed by the employer and returned.
It is important to note that placements cannot be advertised in the traditional sense. The application is instead sent to the local Jobcentre where a Work Coach is tasked with identifying suitable candidates, whose details are then forwarded onto you. You can then choose from the selection of applicants provided and conduct interviews in the normal way.
You will only become entitled to receive funding for participants that have been introduced to you via the job centres Work Coach and once the participant has started employment.
The Department for Work and Pensions (DWP) may contact the employer or the participant during the job placement to check what employability support has been offered. This is to make sure that the participant gets the best experience from the scheme.
How is funding paid?
Once the employer has confirmed that the participant has started employment, is enrolled on their payroll and is being paid through PAYE, they will then receive initial setup costs. The DWP will use the information from HMRC to check that the participant is still employed. Once confirmed, the grant will then be paid in arrears.
The last six months have brought with it many different additions to the world of Employment Law and this is likely to continue. It will be interesting to see the status of such placements in the future and the entitlements individuals on the placements will have, which we will provide more detail of in the future. If you have any questions regarding the Kickstart Scheme or how we can support you and your business, you can contact us today on 023 8071 7717 or email firstname.lastname@example.org.
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This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice. All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.