The Job Support Scheme (updated)
Due to the extension of the Coronavirus Job Retention Scheme, The Job Support Scheme has been postponed until December 2020 and the guidance for this scheme subsequently withdrawn. We will publish further details once available.
Recognising the evolving situation with the pandemic and health restrictions, and the pressures employers are facing this winter, the Government announced on 22nd November 2020 that it will increase the scale of support available to employers through the Job Support Scheme Open above what was initially announced, in order to protect more jobs.
The minimum hours required for employees to work has dropped from 33% to 20% and the employer contribution for non-worked hours has dropped from a third to 5%.
The scheme will run for six months from 1 November 2020 and this increased support for employers will be reviewed in the new year.
Also being published is a JSS policy paper, found here:
This provides detailed guidance on eligibility criteria, conditions and timescales for making claims under the JSS Open and the JSS Closed.
As part of the overall support offered by the Job Support Scheme, the Job Support Scheme Open is designed to protect jobs in businesses who can operate safely but are facing lower demand over the winter months due to Covid-19. The scheme enables these businesses to retain employees on shorter hours, preserving valuable employment matches and protecting incomes.
The Government will now pay 61.67% of hours not worked up to a cap of £1,541.75 per month, with the employer contributing 5% of non-worked hours up to a cap of £125 per month. These caps are based on a monthly reference salary of £3,125. This will ensure employees earn a minimum of at least 73% of their normal wages, where their usual wages do not exceed the reference salary. The employee will have to work a minimum of 20% of their normal hours.
Employers using the Job Support Scheme Open will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
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 (CJRS).
- Large employers (with 250 or more employees) will have to meet a financial impact test, so the scheme is only available to those whose turnover has stayed level or is lower now than before experiencing difficulties from Covid-19. There will be no financial impact test for small and medium enterprises (SMEs) and charities.
- Fully publicly funded organisations are not expected to use the scheme, as has been the case with the CJRS, but partially publicly funded organisations are eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.
- Employers must have agreed the temporary working arrangement for shorter hours in writing with employees (or union).
- Employees must be on an employer’s PAYE payroll between 6 April 2019 to 23:59 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.
- the employee must work at least 20% of their usual hours and they can undertake training in their working hours whilst being claimed for.
- Staff on any type of contract are eligible, including those on variable or zero hours and agency workers.
- 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 consecutive days.
What does the grant cover?
- The grant must be used to pay the employee. For every hour not worked by the employee, they will be paid a total of two-thirds of the usual hourly wage for that employee, up to a cap.
- Employers will pay 5% of non-worked hours, capped at £125 per month, and NICs and automatic enrolment pension contributions in full as a contribution. Employers can top up employee’s wages above the 5% contribution at their own discretion.
- The Government will contribute 61.67% of non-worked hours, capped at £1,541.75 per month.
- When combined with the minimum hours requirement, this means that employees on the scheme will receive at least 73% of their wages, where their usual wages do not exceed the reference salary.
- 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. Full details will be set out in guidance shortly. 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.
What does it mean to be on reduced hours?
- The employee must be working at least 20% of their usual hours.
- For the time worked, employees must be paid their contracted wage.
- For time not worked, the employee will be paid up to two-thirds of their usual wage, where it does not exceed the cap.
- 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.
In an announcement on Thursday 5 November 2020, the government is extending the CJRS to support individuals and businesses who are impacted by disruption caused by coronavirus (COVID-19) this winter. We have extracted the subsequent guidance released by HMRC which is published here.
Announced on Friday 9th October is an expansion to The Job Support Scheme to provide temporary support to businesses whose premises have been legally required to close as a direct result of Coronavirus restrictions set by one or more of the four governments of the UK.