With the second wave of infections, the Chancellor has announced changes to coronavirus support schemes from 1st November 2020.
Job Support Scheme (JSS)
The Job Retention Scheme (JRS) was due to end on 31st October, and be replaced by the JSS.
The JSS in its original form was announced in late September. Then, on 9th October, the Chancellor announced an ‘expanded JSS’ to help businesses forced to close due to local lockdowns.
For clarity, we’re going to talk about Original JSS and Expanded JSS, as the rules in each are quite different.
In this article, we cover the Original JSS; see here instead for the ‘Expanded JSS’.
Summary
The JSS, like the JRS, supports workers who are working less than their usual hours. However, under the JSS, the employee must be working at least 33% of their usual hours.
For hours worked, the employer will pay the wages, employers’ NIC and employers’ pension contributions.
For hours not worked (compared to the employees usual working hours), the burden will be shared between the government, employer and employee on an equal basis of 1/3 each.
However, the employer will still be liable for Employer NICs and pension contributions, as the JSS grant does not cover these elements.
There is also a cap to the amount the government will cover, of £697.92 per month.
Eligibility
- To be eligible for the JSS, employees must be working at least 33% of their usual hours.
- After three months from 1st November, the government will consider whether to increase the minimum hours threshold, presumably in light of the situation at the time.
- The employer or employee doesn’t need to have been using the JRS to be eligible for the JSS.
- Employees must have been on a payroll on or before 23 September 2020, meaning that an RTI submission must have been sent to HMRC before 23 September 2020.
- The working hours can be different each month, and can cycle on and off, but each short-time working arrangement must cover a minimum period of seven days.
Payments
- Payments will be made in arrears (unlike the JRS), once the RTI confirming the wage payment has been sent to HMRC.
- Employers will be able to make their first claim only in December 2020.
- The grants will then be paid on a monthly basis.
Other points
- The JSS will operate for 6 months, from 1st November 2020 to April 2021.
- ‘Usual wages’ calculations will follow a similar methodology as the JRS; more details are expected from the government shortly.
- ‘Usual wages’ for employees furloughed will reflect their pre-furlough wages, and not the reduced wages they received when furloughed.
- Employers are not expected to ‘top-up’ their employees’ wages, above the two-thirds contribution (i.e. government contribution + employer contribution).
- 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.
- Employers must agree the new short-time working arrangements with their staff and 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.
- Employers using the JSS will still be eligible for the JRS bonus in February 2021, if they meet the criteria.
Example
- 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.
Here’s a table showing how this works for employees working different proportions of their usual working hours:
What’s the impact on directors
Currently, it’s not clear how the JSS is going to work for directors, where ‘usual hours’ are more difficult to establish, because of a normal lack of contract.
As we find out more, we’ll let our clients know.
