The Job Support Scheme (JSS)
Deriving from the Government’s Winter Economy Plan, the Job Support Scheme (JSS), which will replace the CJRS, will begin on 1 November 2020.
The Coronavirus Job Retention Scheme (CJRS) comes to an end on 31 October 2020. In a statement released on 24 September 2020, Chancellor Rishi Sunak unveiled new measures intended to support employers with employee wages and to keep employees in work, as far as is reasonably practicable, after the CJRS closes.
The Job Support Scheme (JSS) is designed to protect viable jobs in businesses facing lower demand throughout the winter months due to the impact of Covid-19. Its intention is to keep employees attached to the workforce where possible and to avoid a wave of redundancies and job losses when the CJRS ceases.
What we know about the Job Support Scheme
- Duration: The JSS will replace the CJRS from 1 November 2020 and will be in place for a period of six months, until April 2021.
- Employer Eligibility: All employers with a UK bank account and UK PAYE scheme are eligible. Neither the employer nor the employee needs to have utilised the CJRS previously. Larger businesses will have to meet a financial assessment, ensuring the scheme is only available to those whose turnover has decreased due to the impact of Covid-19. Small and medium enterprises (SMEs) will not be subject to any financial assessments. We have yet to learn how an SME will be defined.
- Employee Eligibility: Employers can only claim for employees who were on their PAYE payroll on or before 23 September 2020, meaning that a Real Time Information (RTI) submission notifying payment to that employee must have been made to HMRC on or before 23 September 2020.
- Scheme Details: For the first three months of the JSS, employees must be working at least 33% of their usual hours and the employer will be responsible for the normal contracted wages for the hours worked. Thereafter, the Government will decide whether to increase the minimum hours threshold. Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
In respect of the hours not worked, the employee will be paid two thirds of their usual wages, subject to the Government cap. This will be equally split between the Government, the employer and the employee (through a wage reduction).
For example: if an employee works 33% of their normal working hours, the Government and the employer will each contribute a third of the 67% of hours not worked. This amounts to 22% subject to the Government cap with the employee agreeing to receive a wage reduction for the final third share of the 67% of hours not worked.
The Government’s contribution will be capped at £697.92 per month. Government and employer contributions will reduce on a sliding scale the more hours an employee actually works. Employees using the scheme will receive at least 77% of their pay, where the Government contribution has not been capped.
Payments made under the scheme will be made in arrears. The JSS will not cover any National Insurance Contributions (NICs) or pension payments, meaning employers will remain responsible for those liabilities.
The approach to calculating an employee’s usual wages is expected to be similar to that used by the CJRS. Employees previously furloughed will have their contractual pay and/or hours used to calculate their usual wages, not the amount they were paid whilst on furlough.
- How to Claim for Job Support Scheme: The JSS will be open from 1 November 2020 and employers will be able to make a claim online via the Government’s website from December 2020. Payments made under the scheme will only be paid on a monthly basis. Claims can only be submitted in respect of a previous pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI submission.
HMRC will check claims and payments may be withheld or clawed back if they are found to be fraudulent or based on false information.
- Short-Time Working Arrangements: Employers must agree, in writing, any short-time working arrangements under the JSS with their employees in advance. Such agreement must be retained and made available to HMRC on request.
- Redundancy: Importantly, in contrast to the CJRS, an employee cannot be made redundant or put on notice of redundancy during any period in respect of which an employer is claiming a grant under the JSS for them. It is not yet clear whether that applies for the whole six months of the JSS or a particular pay period, but further guidance is expected.
- Job Retention Bonus: Employers using the JSS can claim the Job Retention Bonus if eligible.
Further details on the scheme can be found here.