Scottish social care workers first to receive £500 “thank you“ bonus
By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)
8 February 2021
Justine Riccomini explains the process by which workers in the NHS and social care workers in Scotland will each receive £500 from the Scottish Government, starting with the social care workers – provided their employer applies by 11.59pm on 15 February 2021.
Bonus time
The Scottish First Minister announced proposals to make one-off payments to all Scottish health and social care workers in November 2020. On 2 February, the Scottish Government announced the first tranche of payments will be made to workers in social care of a bonus of £500 to say “thank you” for everything they have done during the pandemic. The bonus is to be paid gross, at £500 full-time equivalent (FTE), pro-rata for part time staff based on average hours actually worked, and is then subject to the usual deductions of PAYE and NICs, as the bonus is not exempt under the legislation at S.62 ITEPA 2003 and as such, also attracts an NICs liability under S.6 SSCBA 1992.
The employer will also receive an additional amount of £69 FTE per employee to compensate them for the employer’s NICs which they would otherwise have had to fund themselves.
A similar scheme is being rolled out in Wales.
Who is eligible?
Eligible employees in the first tranche of payments include those who are working for registered independent and voluntary organisations in Scotland. These payments will be followed by similar ‘thank you’ payments to those working in the NHS, independent NHS contractors, hospice, personal care and support and local authority sectors.
The guidance states: ”Staff employed in registered adult social care or children’s residential care services who have been employed for a minimum of a continuous 4 week period between 17 March and 30 November 2020 will be eligible for the payment, including those who have since left or retired”. Agency workers are ineligible. Employees not wishing to receive the payment can opt out.
Deadline fast approaching
Although the announcement setting out the final proposals was only made on 2 February 2021, social care employers only have until 15 February 2021 at 11.59pm to apply for the payments to be made. All claims must be made using the online application form, and there is guidance and a set of FAQs available to assist applicants. For anything else, there is an email address, although it is not certain that given the tight timescales for applications, any form of useful response will be received.
Record-keeping
Record-keeping is, of course, paramount and employers should be prepared to maintain a comprehensive set of records of the number of staff for whom an application has been made, including the FTE salary levels. Scotland Excel, the body which is administering this initiative, as well as the Auditor General for Scotland, may well wish to seek further information down the line. Records should be kept for 6 years and in line with GDPR regulations.
Overpayments
Where an overclaim has been made, this must be repaid to the fund within 14 days of receipt of a written demand, otherwise interest will be charged at 2% per annum above the Bank of England base lending rate prevailing at the time of the written demand from the date of the written demand until payment in full of both the sum and the interest.
Will the employees receive the money?
The employer has to sign a declaration which states that they undertake to pay the employees the money they have claimed. The payments will not form part of any consolidated pay agreement, meaning they do not count for pension or pay rise purposes.
If you wish to contribute to the debate
If you wish to contribute to the debate, why not email the tax team on tax@icas.com or start a conversation on CA Connect, the online forum for CAs.