Update 1 November – Job Support Scheme delayed
Following the Government’s announcement that there will be a 2nd national lockdown from Thursday 5 November, the Job Support Scheme has been suspended until the extended furlough scheme ends.
Update 22 October
On 22 October, Rishi Sunak announced changes to the Job Support Scheme (JSS) that have NOT been required to close under the current restrictions in place. This is called JSS Open and the details are:
- Employees are now required to work 20% of their contracted hours
- Employers are now required to contribute 5% of unworked hours
- The Government will now pay 61.67% of unworked hours up to a cap of £1,541.75
- Employers can top up wages if they wish
All other aspects of the Job Support Scheme remain the same.
The Government had previously announced an extension to the Job Support Scheme (JSS).
What is the Job Support Scheme extension?
The Government will pay 2/3 (67%) of an employee’s wages (capped at £2,100.00) for those companies that are legally forced to close due to National or Regional lockdowns. This is JSS Closed and the details are:
- Employers do not have to have had claimed on the Job Retention Scheme (CJRS) to be entitled to claim on the extended Job Support Scheme
- If the company site is allowed to “re-open” employers can still claim on the standard Job Support Scheme
- As per the Job Support Scheme, an employer cannot make an employee redundant or put them on notice of redundancy during the period in respect of which their employer is making a claim.
- HMRC will publish the names of employers that have used the JSS, so that employees can see if their employer has claimed for them.
- An employee must be on the scheme for seven consecutive days from when the business was told to close
- Employees must have been on the RTI submission made on or before 23/09/2020
What will the grant cover?
- Two thirds (67%) of eligible employees’ normal pay (up to £2,100 per month)
- The employer will be expected to cover Employer National Insurance and pension costs
- Employers are not expected to contribute towards their employee’s salary but are free to top the salary if they wish to do so
The conditions attached to the extension are the same as the Job Support Scheme.
View our Job Support Scheme webinar.
What is the Job Support Scheme?
The Job Support Scheme replaces the Coronavirus Job Retention Scheme (CJRS) and launches on 1 November for 6 months.
The details are:
- Employees must work at least a third of their normal hours. Employers will pay them for all hours worked.
- The remaining wages will be paid a third by the employer, a third by the Government, and the employee will not receive the remaining third.
- All small and medium sizes are eligible, larger only when turnover falls (details of this to be confirmed)
- Businesses can claim BOTH the Job Support Scheme and the Job Retention Bonus
- Open to businesses that have not used the Coronavirus Job Retention Scheme
The self-employed grant will also be extended on a similar basis.
What is the Job Support Scheme
- The Job Support Scheme is designed to protect viable jobs in businesses that are facing lower demand over the winter months due to Covid-19.
- The company will continue to pay its employee for time worked, but the burden of hours not worked will be split between the employer, the Government, and the employee (through a wage reduction), and the employee will keep their job.
- This is to help businesses that need it most: focusing on those that are being impacted by Coronavirus and who can support their employees doing some work, but that need more time for demand to recover.
- The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
- Employers using the Coronavirus Job Support Scheme (CJRS) will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
- The scheme will open on 1 November 2020 and run for 6 months, until April 2021.
Who is eligible?
- All employers with a UK bank account and UK PAYE schemes can claim the grant.
- Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.
- Large businesses will have to meet a financial assessment test, so the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19. There will be no financial assessment test for small and medium enterprises (SMEs).
- The government’s expectation is that large employers using the Job Support Scheme will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant. More details will follow.
- Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.
- In order to support viable jobs, for the first three months of the scheme, the employee must work at least 33% of their usual hours. After 3 months, the government may increase this minimum hours threshold.
- Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
What does the grant cover?
- For every hour not worked by the employee, both the government and employer will pay a third each of the usual hourly wage for that employee. The government contribution will be capped at £697.92 a month.
- Grant payments will be made in arrears, reimbursing the employer for the government’s contribution. The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
- “Usual wages” calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme. Employees who have previously been furloughed will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough.
- Employers must pay employees their contracted wages for hours worked, and the government and employer contributions for hours not worked. The government’s expectation is that employers cannot top up their employees’ wages above the two-thirds contribution to hours not worked at their own expense.
What does it mean to be on reduced hours?
- The employee must be working at least 33% of their usual hours.
- For the time worked, employees must be paid their normal contracted wage.
- For the time not worked, the employee will be paid up to two-thirds of their usual wage.
- Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.
How can I claim?
- The scheme will be open from 1 November 2020 to the end of April 2021.
- Employers will be able to make a claim online through Gov.uk from December 2020. They will be paid on a monthly basis.
- Grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.
- HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred.
- Employers must agree on the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.
- Our intention is that employees will be informed by HMRC directly of full details of the claim.
Example of Job Support Scheme claims
- Peter normally works 5 days a week and earns £350 a week. His company is suffering from reduced sales due to coronavirus. Rather than making Peter redundant, the company puts him on the Job Support Scheme, working 2 days a week (40% of his usual hours).
- Peter’s employer pays him £140 for the days he works. For the time he is not working (3 days or 60%, worth £210), he will also earn 2/3rds, or £140, bringing his total earnings to £280, 80% of his normal wage.
- The Government will give a grant to Peter’s employer worth £70 (1/3 of hours not worked, equivalent to 20% of his normal wages) to support them in keeping Peter’s job.