Job Support Scheme
Last updated 21 October 2020
On 24 September 2020, Chancellor Rishi Sunak announced the replacement to the Coronavirus Job Retention Scheme that is scheduled to end on 31 October 2020. Much detail is still to be released but what do we know for now?
The Job Support Scheme (JSS), starting on 1 November 2020, will operate for six months:
- It will be available for businesses with staff working at least one-third of their normal hours.
- The government will then top up salaries by one-third of the balance to normal salary, with another third due by the employer.
- This results in an employee working 1/3 of their normal hours receiving 77% of their normal wage, with 22% funded by the government and 55% by the employer. The scheme is open to all SMEs and to larger businesses who can show a fall in turnover.
- The government contribution will be capped at £697.92 a month.
- On 9 October 2020, the government announced that the JSS will be expanded to cover firms required to close due to COVID-19 restrictions, by paying eligible businesses two-thirds of each employee’s salary (67%), up to a maximum of £2,100 a month.
Example from HMRC
- Beth normally works 5 days a week and earns £350 a week. Her company is suffering reduced sales due to coronavirus. Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).
- Her employer pays Beth £140 for the days she works.
- And for the time she is not working (3 days or 60%, worth £210), she will also earn 2/3, or £140, bringing her total earnings to £280, 80% of her normal wage.
- The Government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of her normal wages) to Beth’s employer to support them in keeping Beth’s job.
Once an employee has worked 33% of their normal hours a claim can be made on their shortfall and the more they work he closer they should get to their “normal” salary.
How an employee’s salary is funded
1. Are there restrictions on which businesses the scheme is available for?
Yes, the scheme is open to all SMEs, but large businesses will have to meet a financial assessment test, where turnover is lower now than before experiencing difficulties from COVID-19. Find out more.
On 9 October 2020, the government announced that the JSS will be expanded to support businesses across the UK required to close their premises by law due to coronavirus restrictions. In this case, the government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month. Find out more.
The extension of the scheme does not cover businesses who are required to close as a result of specific workplace outbreaks.
2. Are there any restrictions on which employees the scheme is available for?
Yes, the scheme is only available for those employees on the payroll on or before 23 September 2020 but can be on any type of contract including:
- Full-time employees
- Part-time employees
- Employees on agency contracts
- Employees on flexible or zero-hour contracts
3. What hours must the employee work to claim the Job Support Scheme?
For the first three months of the scheme, the employee must work at least 33% of their usual hours.
After 3 months, the Government will consider whether to 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. Working arrangements though must cover a minimum period of seven days.
For businesses that have been forced to close due to coronavirus restrictions, employers must be instructed to and cease work for a minimum of 7 consecutive days.
4. What does the grant cover?
The grant will cover a third of the usual hourly rate for every hour not worked by that employee, up to £697.92 a month.
For businesses that have been forced to close due to coronavirus restrictions, the government will pay two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
The grant does not cover Class 1 employer NICs or pension contributions, and these contributions remain payable by the employer.
Full details on the calculations will be released in further guidance, however it is expected it will follow a similar methodology of the Coronavirus Job Retention Scheme.
5. Can furloughed members of staff be placed on the Job Support Scheme?
Yes, furloughed employees will have their underlying usual pay/hours worked used to calculate usual wages, not the amount they were paid whilst on furlough.
6. How do I make a claim for a grant through the scheme?
Employers will be able to make a claim online through Gov.uk from December 2020. They will be paid on a monthly basis.
7. Can I still claim the Job Retention Bonus?
Employers using the Job Support Scheme will still be able to claim the Job Retention Bonus if they meet the eligibility criteria.
As we are now very used to, there will be more detail released over the coming days and weeks. It is clear that once again though there is a need for strong records – hours forming the basis of any claim.
The Chancellor has widely told us this is not designed to save all jobs, as that, unfortunately, is not possible we know. However, this support, together with the Job Retention Bonus at the end of January may be enough to keep many people employed. It is also widely recognised that retaining good staff is beneficial to most businesses and the hope is that many sectors for which this is aimed can be those that bounce back relatively quickly.
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