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Everything you need to know about the Job Support Scheme

Paloma Kubiak
Written By:
Paloma Kubiak

The government’s Job Support Scheme will follow on from furlough which is due to end this month. Here’s everything you need to know about the new Covid wage support package.

Update 1 Nov 2020: The government announced an extension to the furlough scheme while the Job Support Scheme will be postponed until December. 

Furlough – the Coronavirus Job Retention Scheme – will come to an end on 31 October where it will be replaced by the Job Support Scheme (JSS) from 1 November 2020.

Its aim is to help employers suffering financially due to coronavirus restrictions and to prop up the wages of workers in areas under tighter lockdown measures.

Below, Kate Palmer, HR advice and consultancy director at global employment law consultancy, Peninsula, explains the details of the new scheme…

Q) Who’s eligible for the scheme?

A) The government will be able to help employers suffering from business downturn as a result of coronavirus restrictions or who have been told to close completely.

There are no specific sector or industry restrictions on the JSS which means all types of business can use it provided they meet the eligibility criteria which includes having a UK, Channel Island or Isle of Man bank account and have enrolled for PAYE online.

The scheme will be open to small and medium-sized firms across the UK. However, for large businesses (those with 250+ employees) to qualify for the JSS (Open), they have an extra test to pass; they must be able to show that their turnover has stayed the same or decreased because of coronavirus; businesses under this threshold are not subject to this test.

Q) Why is there an ‘open’ and ‘closed’ version of the JSS?

A) Businesses that can operate safely but are facing reduced demand over winter because of challenges created by coronavirus will be able to access the JSS (Open). Businesses legally required to close their premises temporarily as a direct result of coronavirus restrictions will be able to access the JSS (Closed).

Q) How does it work?

A) To access the JSS (Open), employees must work for at least 20% of their regular working hours – in ‘viable’ jobs – with employers covering the wages for those worked hours. For hours not worked, employers will be asked to contribute 5% of employees’ wages while the government will contribute 61.67% of wages (for hours employees do not work), to a monetary cap of £1,541.75 per month per employee.

From 1 November 2020, all businesses across the UK who are required to close as part of local/national lockdown will receive wage assistance through JSS (Closed) for employees who do not work for a minimum of seven calendar days. A financial assessment for large businesses will, however, not apply.

The expansion is being rolled out to run until 30 April 2021 with the government paying two-thirds of each employee’s salary, up to a maximum of £2,083.33 a month per employee. Employers will not be required to contribute towards staff wages but will have to cover National Insurance Contributions (NICs) and pension contributions.

Q) How can I work 20% of my usual hours in locked down areas?

A) If the business has been required to close as a direct result of coronavirus on the instruction of one of the four UK governments, it will be able to access the JSS (Closed). This will provide a grant for two thirds of an employee’s wages to a maximum of £2,083.33 per month, with no contribution to wages needed from the employer.

Q) What if I don’t work ‘regular’ hours?

A) For the (Open) scheme, the usual number of hours for someone who is not contracted to work fixed hours or where their pay depends on the number of hours they work is calculated based on the higher of the number of hours worked in the same calendar period in the tax year 2019/20; the average number of hours worked in the tax year 2019/20; and the average number of hours worked from 1 February 2020 (or the employee’s start date if later) until 23 September 2020.

Q) What if I can’t work the minimum hours due to Covid/childcare or care duties?

A) This is not yet clear. We need to wait for government guidance on this.

Q) What happens with pension contributions and National Insurance Contributions?

A) NICs and pension contributions are not covered by the grant, so the employer remains liable to pay them. They are payable on the full amount of wage received by the employee, including that which will be reimbursed by the grant.

Q) Are we eligible for the JSS if we didn’t sign up for the furlough scheme?

A) The new scheme will be available for employers from 1 November 2020 regardless of whether they have made use of the  Coronavirus Job Retention Scheme or not and will be in place until 30 April 2021.

Q) When must an employee have been hired by the company?

A) For an employee to be entered into either of the two versions of the JSS, they must have been on the employer’s PAYE payroll between 6 April 2019 and 23:59 on 23 September 2020. This means an RTI Full Payment Submission notifying payment in respect of that employee must have been made to HMRC at some point from 6 April 2019 up to 11:59pm 23 September 2020.

If employees ceased employment after 23 September 2020 and were subsequently rehired, then employers can claim for them.

Q) When can claims be made?

A) Claims can be made online from 8 December 2020, and reimbursement will be made every month.

This means essentially for now, businesses still have to pay their staff usual wages so they should try to obtain funds from elsewhere, or ease outgoings. For example, one of the government’s grant or loan schemes that were put in place specifically in response to coronavirus could be used.

Q) Can claims be backdated?

A) The guidance confirms that JSS grants will be paid in arrears to reimburse the employer for the government’s contribution. Claims can only be submitted in respect of a wage cost actually incurred in any given pay period after payment to the employee has been made, and that payment has been reported to HMRC via an RTI submission.

Q) What about redundancy…Can I be put on JSS instead?

A) Employees cannot be serving a redundancy notice period during the claim period which means anyone already given notice of redundancy cannot be entered into the scheme. This is because the (Open) scheme is there to support ‘viable’ jobs where a minimum amount of working hours is possible and a role that has been made redundant is not ‘viable’. If they were made redundant after 23 September and then re-hired, they can be claimed for.

Q) What about employees on Universal Credit?

A) Lowest paid employees who are on Universal Credit are likely to see an increase in the Universal Credit benefit to complement their JSS pay, the government confirmed.