PM+M Director Julie Mason outlines the key details of the Job Support Scheme to provide guidance to employers looking to make use of this new Government initiative.
As the furlough scheme (or Coronavirus Job Retention Scheme) comes to an end, many of our clients have been asking for information on the Government’s new Job Support Scheme, which is due to launch at the beginning of November.
We thought it would be useful to outline the key details of the scheme and everything we know so far. Here’s the main points:
– The scheme has been created to give support to businesses where employees need to work reduced hours in sectors that are facing lower demand or are forced to close due to COVID-19 restrictions.
– The scheme is based on the principle that employees’ jobs will be retained, despite working reduced hours or businesses undergoing a full closure.
– The ultimate goal of the JSS is to ‘protect viable jobs’.
– Two different schemes are set to become available: the Job Support Scheme Closed (for Tier 3 businesses who are forced to close) and the Job Support Scheme Open (for all other businesses affected by restrictions). Each scheme is structured in a slightly different way.
Job Support Scheme Closed (for Tier 3 businesses who are forced to close)
– To qualify for this scheme, employers must have been legally required to close their premises as part of Tier 3 restrictions.
– Employees who cannot work will receive two thirds of their usual wage, paid by their employer but fully funded by the Government (capped at a maximum of £2,083.33 per month).
– Employers are able to pay more than this allowance at their own discretion.
– Work patterns of the employees may vary, as long as they have ceased working for a minimum of at least 7 consecutive calendar days.
Job Support Scheme Open (for all businesses affected by restrictions, who are not legally required to close)
– To qualify for this scheme, employees must work a minimum of 20% of their normal working hours (this was previously one third of normal working hours).
– Employers will continue to pay for the hours worked by the employee as normal.
– As part of the scheme, the employee will receive 66.67% of their usual wage for any hours not worked (rather than payment for the full 80% of time not worked).
– Payment for the hours not worked will be split between the employer, the Government and the employee themselves by way of hours forgone.
– For the hours not worked, the employer will pay 5% of the employee’s usual wage, up to a maximum of £125 per month (with the discretion to pay more than this if they wish).
– The Government will pay the remainder, translating to 61.67% of reference salary for the hours not worked (up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
Key details for both schemes
– Both parts of the scheme will be open from 1 November 2020 and will run for 6 months, until 30 April 2021. The government has said this will be reviewed in January 2021.
– Neither the employer nor the employee needs to have benefitted from the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme.
– Grants will be made in arrears and following an RTI return being reported to HMRC.
– Grants will not cover class 1 employer National Insurance contributions (NICs) or pension contributions. These contributions will remain payable by the employer (applicable to both parts of the scheme).
– Grants will be claimed online through Gov.uk on a monthly basis, starting from 8 December 2020 (covering salary for pay periods ending and paid in November).
– The “usual wages” calculation will follow a similar methodology to that of the Coronavirus Job Retention Scheme.
– Employees can be on any type of contract, including zero hours or temporary contracts.
– Employees cannot be made redundant or put on notice of redundancy during the period within which the employer is claiming the grant.
– To be eligible for the Job Support Scheme, employees must be on the payroll on or before the 23 September 2020, with an RTI submission made on or before this date.
– All employers with a UK bank account and a PAYE scheme can claim the grant.
– In order to be eligible, large businesses (over 250 employees) will have to meet a financial test to prove their turnover is lower now than it was before COVID-19 difficulties.
– The Government expectation is that large employers will not be making dividend payments or share buybacks whilst utilising the grant.
HMRC’s full guidance can be accessed here.
Get in touch
I hope this blog answered your queries on the Job Support Scheme ahead of its launch in November. For tailored advice or support, please contact me using the button below.
This information is correct as of 26 October 2020. This blog is for general guidance only. Recipients should not act upon any of the information provided without seeking specific professional advice tailored to your circumstances, requirements or needs. Please contact PM+M before making any decisions based on any matters relating to this blog.
