Update 23 October 2020
The Job Support Scheme (JSS) has been significantly changed just weeks before its implementation. This scheme is now set to cover not only those businesses that face decreased demand due to COVID but also those that are forced to close by the operation of 2 separate system : JSS Open and JSS Closed.
JSS Open is a government contribution to wages for employers who are suffering from decreased demand due to Coronavirus. In order to qualify for support the employee must be working at least 20% of their previously ‘normal’ hours and cannot be on a redundancy notice.
The employer will need to pay the cost of the hours worked. The hours unworked will be funded 61.67% by the government (capped at £1,541.75 per month) and 5% by the employer (capped at £125 per month. The employer will also be required to pay the employers NI and automatic enrolment pension contributions in full. Employees on the scheme will therefore receive a minimum of 73% of their normal wages.
As an example:
• Andrew normally works 5 days a week and earns £1,401 a month, working in a restaurant in the hospitality sector. His company is suffering reduced sales due to coronavirus. Rather than making Andrew redundant, the company puts Andrew on the Job Support Scheme, working 20% of his usual hours.
• His employer pays Andrew £280 a month for these hours.
• And for the time he is not working (80%), he will get 66.67% of his pay for that time. His total wage package is 73%, equal to £1,027.
• The Government will give a grant worth £691 (61.67% of hours not worked) to Andrew’s employer to support them in keeping Andrew’s job, and his employer will pay a further £56 for hours not worked (5% of wages).
• In addition, the employer will cover the Employer NICs and auto enrolment pension contribution on the payment (£56).
• His employer may also be eligible for the Job Retention Bonus worth £1,000, this would cover 94.6% of the employer’s total costs for retaining Andrew on the JSS between November and January.
JSS Closed will support businesses that are legally required to close as a direct result of Coronavirus restrictions. It will support the wage costs of employees who have been instructed to cease work in eligible (closed) premises.
Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish .
Both schemes are open to anyone provided they were reported on an RTI payroll on or before 23 September 2020. The employer or the relevant employees do not need to have utilised the furlough scheme previously. This scheme will also support all small and medium sized enterprises. Large enterprises will need to meet a financial impact test to qualify for the scheme, showing that their income has either remained level or decreased since the pandemic began.
The Job Support Scheme will start on 1 November 2020 and continue until the end of April 2021. Payments will be made retrospectively meaning that the employer will have to fund and report the payments using RTI when due and later claim for repayment of the necessary sum. The scheme opens for applications on 8 December 2020.
Employers claiming under either JSS Open or JSS Closed will still be eligible to make a claim for the Job Retention Bonus.