Job Support Scheme
Now that the UK Chancellor has announced a third change to the Job Support Scheme (JSS) that was originally announced on 24th September, we have pulled together all details that we know so far into a single guide.
Job Support Scheme - Open
- The JSS will start to operate from 1st November 2020.
- The scheme will directly support the wages of people:
- In work, but working a reduced number of hours
- Not working because Covid restrictions have closed their place of work
Employees Working Shorter Hours
- Employees must work 20% of their usual hours
- Employers must contribute 5% of the missing hours (up to a maximum of £125 per month)
- The Scheme will contribute 61.67% of the missing hours (up to a maximum of £1541.75 per month)
An employee usually works 168 hours per month. They now work 34 hours, which means there’s a shortfall of 134 hours.
The scheme will cover 61.67% of these hours, so will pay for 82.64 hours.
The employer will cover 5% of these hours, so will pay 6.7 hours.
The employer will also cover the total Employer National Insurance and pension contributions associated with the whole amount paid.
Total hours that the employee will be paid for is 123.34 hours.
- Employees are allowed to work more than 20% of their usual working hours
- The grant is capped at £1541.75 per month
- Anyone employed as of 23/09/2020 will be eligible
- Employers can top up employees' wages above the 5% contribution at their own discretion
Employees at Closed Locations
- Employees work no hours
- The scheme will cover 67% of employees' usual pay up to a maximum of £2,100 per month
An employee usually works 168 hours per month. They are no longer able to work because their pub has been closed under tier 3 local restrictions.
The scheme will cover 67% of these hours, so will pay for 112.56 hours.
The employer will cover only the Employer National Insurance and pension contributions associated with these hours.
Total hours that the employee will be paid for is 112.56 hours.
- If an employee works any hours, they will shift to the rules covered by 'employees working shorter hours'
- The grant is capped at £2,100 per month
- Anyone employed as of 23/09/2020 will be eligible
- Only businesses that are legally forced to shut due to coronavirus tier 3 restrictions can claim the scheme for closed locations
- Businesses must be instructed to close for a minimum of 7 consecutive days
- Businesses ordered to close by local public health authorities due to specific workplace outbreaks are not eligible for this scheme
Who is Eligible?
- All employers with a UK bank account and a UK PAYE scheme registered on or before 23rd September 2020 can claim the grant
- 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 for small and medium enterprises (SMEs)
- Large Employers are expected not to be making capital distributions (dividend payments or share buybacks) whilst accessing the grant
- Employers using the scheme will also still be able to claim the Job Retention Bonus
- Employees must be on the company’s PAYE payroll between 6th April 2019 to 23:59 23rd September 2020. This means a Real-Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23rd September 2020
- Employees on any type of contract are eligible, including those on variable or zero-hours
- Employees do not have to have the same working pattern each month, but each short-term working arrangement must cover a minimum period of 7 days
What are Usual Wages?
- Usual wages calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme
- Employees who have been furloughed will have their underlying usual pay/hours used to calculate usual wages, not their furlough amount
- Employers must pay their employees their contracted wages for the hours worked
The guidance regarding the calculation of usual hours for employees has not yet been published
How can the Job Support Scheme be Claimed?
- Employers will be able to make a claim online through Gov.uk from 8th December 2020
- Claims will be paid on a monthly basis
- Grants will be payable in arrears, meaning they can only be claimed after the payment has been made to the employee and the payment has been made on the RTI return (FPS)
- Class 1 National Insurance and Employers pension contributions are not covered by the Job Support Scheme
- Employers retaining furloughed staff on shorter hours can claim both the Job Support Scheme and the Job Retention Bonus
- Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming support for them
- HMRC will review the terms of the Job Support Scheme in January 2021
- 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
- Employees must agree the new short-term working arrangements. Any changes should be made to employment contracts and confirmation of the changes sent to the employees, in writing. This agreement should be available to HMRC upon request
- HMRC will inform employees directly of the full details of the claim
Further information for all three announcements can be found on these gov.uk links: