On 24 September, Chancellor Rishi Sunak unveiled the details of the new Job Support Scheme (JSS), which is designed to replace the Job Retention Scheme (“furlough scheme”) that will come to an end as planned on 31 October. The new Job Support Scheme will run six months from 1 November 2020. Find out more about the scheme below and if you are eligible to apply.
HOW DOES IT WORK?
Employers will pay for the hours worked, while the government and the employer together will cover two thirds of the hours not worked. The Government contribution will be capped at £697.92 a month.
at least one third
of normal hours.
While the support scheme is meant to protect as many jobs as possible, it will be a big change from the furlough scheme with the government paying 22.2% of employees’ wage – down from 60% under the furlough scheme. Chancellor has said that the scheme can’t save every job but will target “viable jobs” in businesses who are facing lower demand over the winter months due to Covid-19. What this means in practice is still unclear, however, it is likely that industries currently closed and where there is no work to be offered (such as nightclubs), will not be able to benefit from the scheme.
Update on 9 October: Extension of Job Support Scheme to support businesses during local lockdowns
On 9 October, the government announced an expansion of the Job Support Scheme to provide temporary support for businesses which are “formally or legally” required to close due to national or local coronavirus restrictions. Especially workers in the hospitality sector are expected to benefit from this update as it is likely that pubs and restaurants will have to close their doors in the worst-affected areas.
Under the expansion, the government will pay two thirds of the wages, up to a maximum of £2,100 a month while the employers will need to cover National Insurance and pension contributions. Businesses will only be eligible to claim the grant while they are subject to restrictions.
The expanded scheme will be available in all four UK nations.
WHO IS ELIGIBLE?
All small and medium-sized businesses (SMEs) with a UK bank account and UK PAYE scheme
Large companies who can show that their turnover has fallen because of coronavirus
Only large companies will need to go through the financial assessment test. There is no requirement to have previously used the furlough scheme to be eligible.
An employee must have been on the firm’s payroll since at least 23 September 2020.
An employee must be able to work at least a third of their normal hours.
After the scheme has run for three 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 work the same pattern each month. However, each short-time working arrangement must cover a minimum period of seven days.
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.
HOW CAN YOU APPLY?
Employers will be able to make a claim online through GOV.UK from December 2020.
The government will pay the grant in arrears. This means that the employer can submit the claim in respect of a given pay period after payment to the employee has been made and reported to HMRC via an RTI return.
HRMC will check claims and confirm that the wage costs have actually incurred. If the employer has submitted incorrect information, payments can be withheld or need to be paid back. In addition, employers must notify and agree on the new working arrangements with their staff in writing, which must be made available to HMRC on request.
The Government will publish further guidance shortly. More information can be found on the government website here.
Although the full details of the scheme have not been announced yet, and these will be circulated when they are, please raise any questions to our Payroll Manager Lisa Thomas at firstname.lastname@example.org in the first instance.