The Job Support Scheme (JSS) – An Overview

The Job Support Scheme (JSS) was first announced by the Government in September and will replace the Coronavirus Job Retention Scheme (CJRS) (also known as the furlough scheme) when it ends on 31^st October.

The scheme will be in place for six months from 1^st November (ending on 30th April 2021) and aims to protect viable jobs in companies who are facing reduced demand or are legally required to close due to Covid-19 over the winter months.

Below, we have provided a summary of how the Job Support Scheme will work and the eligibility requirements.

How will the Job Support Scheme operate?

Businesses facing decreased demand (JSS Open)

For employers who can remain open but face reduced demand, the JSS will allow them to retain employees in a job on reduced hours, instead of making them redundant. The support available will operate as follows:

• Employees work a minimum of 20% of their normal working hours, which their employer pays them for as normal.
• For the remaining hours not worked (up to 80%), the employee will receive 66.67% of their pay – 5% of which will be paid by the employer (up to a maximum of £125 per month) and the remaining 61.67% by the Government (up to a maximum of £1,541.75 per month).
• The employee will receive at least 73% of their normal working pay, where they earn £3,125 a month or less.

Businesses are able to top up their employees’ pay (at their own expense) above the two-thirds contribution if they wish.

Employers and employees have to both agree to the new working arrangements, and the business will need to notify employees in writing of the arrangements in place, which will amount to a temporary variation of employees’ employment contracts (this also applies to the JSS Closed – see below).

Businesses legally required to close (JSS Closed)

For employers who are by law required to close due to Covid-19 restrictions set by the Government, the JSS will provide financial support during the period that they are legally required to be closed for by paying two-thirds of their employees’ normal working pay to a maximum of £2,083.33 per month per employee. This is paid by their employer initially but fully funded by the Government. The employer can choose to pay over the two-thirds amount if they wish to but any additional amount is paid at the employer’s own expense.

Workers may be entitled to receive additional financial support, e.g. Universal Credit, on top of the pay they receive through the JSS Closed.

Grant payments through the Job Support Scheme

As mentioned above, employers will be reimbursed in arrears for the Government’s contribution. The grant payments the business will receive will not cover Class 1 employer National Insurance or pension contributions – these will still have to be paid by the employer.

The methodology used for calculating employee wages will be similar to that used for CJRS payments and further details on this are expected by the end of October.

Businesses will be able to claim via the Gov.uk website from 8^th December and claims will be paid on a monthly basis. All claims will be subject to HMRC checks, as they were with furlough claims.

Which employers are eligible to access the Job Support Scheme?

The JSS will be available to companies, whether they are claiming via the JSS Open or the JSS Closed, who:

• Haven’t previously accessed the furlough scheme, as well as those who have; and
• Businesses with a UK bank account and a PAYE scheme.

Businesses can claim the JSS Open and the JSS Closed grant at the same time for different workers. However, a business cannot claim for one employee under both the JSS Open and the JSS Closed at the same time.

Employers will still able to also claim the one-off Job Retention Bonus payment of £1,000 for formerly furloughed employees who remain in their job roles until at least February 2021.

In respect of the JSS Open, it will be available to all Small and Medium-Sized Enterprises (SMEs). Large companies (a business with 250 or more employees) will have to undertake a financial assessment test and provide proof that their commercial operations have been severely impacted by the coronavirus in order to be eligible. The Government also expects that large businesses will not be making capital distributions (such as dividends or share buybacks) while accessing the JSS.

Which employees are eligible to access the Job Support Scheme?

In order to use the JSS, employees must:

• Be on an employer’s PAYE payroll between 6^th April 2019 and 11:59pm on 23^rd September 2020. This includes a Real Time Information (RTI) submission, notifying payment to an employee to HMRC being made on or prior to 23^rd September 2020.
• Not have received notice of redundancy in order to be eligible.

Businesses can only claim for workers through the JSS that were in their employment on 23^rd September 2020. For employees who are no longer employed by their employer after 23^rd September but are then subsequently rehired, then employers can claim for them.

The JSS is available to employees on any type of employment contract, such as zero hours or temporary contracts. Agency workers are deemed as employees of an employment agency for the purposes of the JSS, as long as they are employees for Income Tax purposes.

For employers claiming through the JSS Open, workers will be able to come on and off the JSS and don’t have to work the same schedule of working hours each month. However, the new working arrangements whereby employees are working less hours have to cover a minimum period of seven days.

Further guidance on the JSS can be found here.