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.

On 22 October the government announced significant changes to the scheme, which increase the level of support available to employers. Thanks to the changes, employers will now pay less, and staff can work fewer hours and still qualify for the scheme. Read on to find out more about the scheme, the updates announced on 22 October,  and if you are eligible to apply.

HOW DOES IT WORK?

Employee contribution

Employee works
at least 20%
of normal hours
(previously 33%).

Employer contribution

Employer pays 5 %
of non-worked hours
(previously one third
of non-worked hours).

22% unpaid

The remaining
proportion of
the normal wage
will not be paid.

Government contribution

Government pays 61.67%
of hours not worked
(previously one third
of non-worked hours).

Employer contribution will be capped at £125 per month and the Government contribution at £1,541.75 per month.  However, employers can pay more than the 5% contribution if they wish.

These caps are based on a monthly reference salary of £3,125. The updates to the scheme ensure employees earn a minimum of at least 73% of their normal wages (where their usual wages do not exceed the reference salary).

Note that employers must notify and agree on the new working arrangements with their staff in writing, which must be made available to HMRC on request.

WHO IS ELIGIBLE?

Eligible Businesses

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 stayed level or 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.

Eligible Employees

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 20% 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.

Job Support Scheme Grant

HOW CAN YOU APPLY?

Employers will be able to make a claim online through GOV.UK from 8 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. HMRC intend to publish the names of employers who have used the scheme, which means that the public can report fraud to HMRC if they have evidence to suggest an employer is abusing the scheme.

The Government will publish further guidance at the end of October. 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 lisa.thomas@goodwille.com in the first instance.

WHAT IS JSS CLOSED?

The above information on this page is applied to businesses that are able to remain open during this time. However, on 9 October the government announced 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 £2,083.33 per month, although their employer has discretion to pay more than this if they wish. Businesses will only be eligible to claim the grant while they are subject to restrictions.

Employees may also be entitled to additional financial support, including Universal Credit.