The Job Support Scheme
Chancellor Rishi Sunak announced the Job Support Scheme (JSS) on 24 September 2020 as part of the Winter Economy Plan.
The six month scheme will run from 1 November and is intended to safeguard viable jobs in businesses who are facing lower demand over the winter due to the impact of COVID-19.
Businesses will continue to pay employees for time worked, but the burden of hours not worked will be shared through wage support, and wage reduction between the employer, the Government and the employee. The scheme guarantees an employee will receive at least 77% of their pay, where the government grant has not been capped.
How will it work?
- An employee will need to work and be paid for at least one-third of their normal working hours (33%).
- For the employee’s remaining hours (67%), one-third (22%) will be paid by the employer and one-third (22%) will be paid by the government. The level of the government grant will be calculated based on the employee’s usual salary, capped at £697.92 per month.
- Any calculations should be based on an employee’s usual salary and or hours, not the amount they were paid whilst on furlough.
- 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.
- Class 1 employer NICs and pension contributions remain payable by the employer. The grant will not cover these contributions.
Who is eligible?
- All small and medium sized businesses will be eligible. There will be no financial assessment test for small and medium enterprises (SMEs)
- Larger businesses will only be eligible if their turnover has fallen during the pandemic and the government expects that they will not be making capital distributions (such as dividends) while using the JSS.
- The JSS will be open to employers throughout the UK with a UK bank account and a UK PAYE scheme regardless of whether they have previously used the furlough scheme.
- 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.
- The JSS is not available for employees who have been given notice of redundancy as it is a scheme to preserve viable jobs.
- Employers who retain furloughed staff on reduced hours will be able to claim under both the JSS and the Jobs Retention Bonus if they meet the criteria.
How to 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 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.
Self Employment Income Support Scheme (SEISS)
The self-employed will be assisted through the extension of the Self Employment Income Support Scheme (SEISS). For those currently eligible for SEISS and who continue to actively trade but face reduced demand, there will be an initial taxable grant worth 20% of average monthly trading profits, up to a total of £1,875, covering the period from November to the end of January 2021. A further grant, the level of which will be reviewed and set in due course, will be available for the period from February to the end of April 2021.