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Job Support Scheme

As part of the Winter Economy Plan Chancellor Rishi Sunak announced the introduction of the government’s new Job Support Scheme (JSS). The JSS aims to protect jobs and support businesses over the coming months.

Following the initial announcement, the Chancellor announced an extension of the JSS.  The Job Support Scheme Expansion is designed to provide further support for businesses that have been legally required to close as a direct result of the COVID-19 restrictions set by one or more of the four governments of the UK.

The JSS and the Expansion are introduced from 1 November. The existing Job Retention Scheme, known as the furlough scheme, ends on 31 October.

Job Support Scheme

For employers to participate in the scheme:

  • employees will need to work a minimum of 33% of their usual hours
  • for every hour not worked, the employer and the government will each pay one third of the employee’s ‘usual hourly wage’
  • the government contribution will be capped at £697.92 per month
  • Class 1 employer National Insurance contributions and pension contributions will be due on the employee’s earnings and will be payable in full by the employer.

‘Usual wages’ calculations will follow a similar methodology as those for the furlough scheme. The scheme will run for six months from 1 November 2020.
Full details will be set out in guidance which is to follow.

Employees using the scheme will receive at least 77% of their pay, where the government contribution has not been capped.

The government guidance sets out a helpful table how the payment will be calculated with different percentages of working time.

Hours employee worked 33% 40% 50% 60% 70%
Hours Employee not worked 67% 60% 50% 40% 30%
Employee Earnings (% of normal) 78% 80% 83% 87% 90%
Government Grant (% of normal wages) 22% 20% 17% 13% 10%
Employer cost (% of normal wages) 55% 60% 67% 73% 80%

This table assumes the government contribution is not capped at the maximum monthly amount of £697.92.

The government has issued an example of how the JSS will work.

Beth normally works five days a week and earns £350 a week. Her employer is experiencing reduced sales due to COVID-19. Rather than making Beth redundant her employer puts Beth on the JSS, working two days a week (40% of her usual hours).

Under the JSS:

  • Her employer pays Beth £140 for the days she works
  • For the time she is not working (3 days or 60%, being £210) she will earn two thirds of her normal wages being £140 (2/3 of £210) bringing her total earnings to £280 (80% of her normal wage).
  • The government will pay a grant of £70 (1/3 of hours not worked to Beth’s employer).

All small and medium-sized enterprises will be eligible and will not be subject to financial assessment. Large businesses will have to meet a financial assessment test, so the scheme is only available to those businesses whose turnover is lower now than before experiencing difficulties from COVID-19. The government also expects that large employers will not be making distributions while using the scheme.

Job Support Scheme Expansion

The Expansion provides temporary support to businesses whose premises have been legally required to close as a direct result of COVID-19 restrictions set by one or more of the four governments of the UK.

The scheme will be available from 1 November for six months and will be reviewed in January. Employers will be able to make a claim on a monthly basis online through from December.

Claims must not overlap and must be made monthly in arrears. The payments will be taxable and employers will be required to cover employer NICs and automatic enrolment pension contributions in full, where applicable. HMRC will check claims and payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information.

The grant per eligible employee is two thirds of their ‘normal pay’ up to a limit of £2,100 per month. The government will provide further detail on how normal pay is calculated.

Employers will be able to use the Expansion whilst their premises are closed and move employees onto the JSS if they are eligible when they are able to re-open.

Please contact us for further information on the Job Support Scheme.