This article includes all the relevant information from the Chancellor’s original JSS announcement on 24 September. It also covers the extension of the scheme announced on 9 October, as well as the significant revision to the support offered announced on 22 October. We have now also revised the article in light of the scheme being delayed (as announced on 31 October).
The new Job Support Scheme (JSS) will replace the Coronavirus Job Retention Scheme (CJRS) when this comes to an end. The initial details of the JSS were published on 24 September with an extension to closed businesses announced on 9 October, and a further significant revision to support levels announced on 22 October. We are still awaiting further information and guidance to be issued, which was promised by the end of October. Due to the announcement of the new national lockdown and the extension of the CJRS through November, the JSS has now been delayed until the CJRS comes to an end. To read more about the details of the CJRS, please click here.
Main points about the JSS
• The JSS is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce
• The scheme is now divided into JSS (Open) which applies to businesses running at a reduced capacity and JSS (Closed) which will support businesses who are legally required to close as a result of national or local restrictions
• The scheme was due to open on 1 November 2020 and run for six months until the end of April 2021; it has now been delayed until the end of the CJRS and we await confirmation of the new start date and duration
• You can claim support from the JSS and claim the JR Bonus at the same time; you can also claim from JSS (Open) and JSS (Closed) at the same time, but not for the same employee for the same period
• Employers must agree the new working arrangements with their staff, 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
Who is eligible?
• All employers with a UK bank account and UK PAYE schemes can claim the grant
• There will be no financial assessment for employers with less than 250 employees on 23 September (this date is now subject to change), but large businesses employing 250 or more people on the relevant date will have to undertake a Financial Impact Test to show that they have been adversely affected because of Covid-19
• The original announcement of the scheme included the expectation that the employer will not be able to top up the employee’s salary to 100%, however the latest announcement confirms that employers will be able to top up employee wages above the level of minimum contributions at their own expense if they wish
• Neither the employer nor the employee needs to have previously used the CJRS
• Employees must be on the employer’s payroll before 23 September (this date is now subject to change) which means a payroll submission must have been made to HMRC including the employee before this date. For monthly payrolls this will most often mean that the employee must have been included on the August payroll.
• Employees cannot be made redundant or put on notice of redundancy while the grant is claimed for them
How much support will we receive (JSS Open)?
• To be eligible for the support under JSS (Open), the employee must work at least 20% of their normal working hours and be paid normally by their employer for these hours
• The cost of hours not worked will be split between the employer, the Government and the employee (through a wage reduction), and the employee will keep their job
• For every hour not worked, the Government will contribute 61.67% of the reference salary for that employee, the contribution will be capped at £1,541.75 per month
• The employer will also have to contribute and their contribution is set at 5%, capped at £125 per month
• The employee will receive up to 66.67% of their usual pay for the hours not worked. In total the employee will receive 73% of their normal wage per month (where the contributions are not capped)
Extension if JSS is for businesses forced to close (now called JSS Closed)
• JSS (Closed) applies to businesses that have been legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK
• Businesses required to close as a result of specific workplace outbreaks by local public health authorities are not eligible for this scheme
• The Government will support eligible businesses by paying two thirds of each employee’s salary (or 67%), up to a maximum of £2,083.33 per month
• Employers will not be required to contribute towards wages and will only be asked to cover NICS and pension contributions, but the employer has the discretion to pay more than this if they wish
• Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days
How to claim?
• Payments will be made on a monthly basis and we are awaiting guidance to confirm how this will operate for employers who run their payroll on a different period
• Payments will be made in arrears and the claims can only be submitted after the relevant period’s payroll has been submitted to HMRC
If you have any questions regarding the JSS, please contact Andreja Okamgba.