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  • Mr Paul Clifton

Job Support Scheme (JSS) (the new ‘furlough scheme’)

The JSS below, that was to launch on 1 November 2020, has been delayed until early April 2021 as the furlough Job Retention Scheme will be extended. (updated 5 November 2020)

Government to now pay up to half of wages (updated 22 October 2020)

There are now two Job Support Schemes (JSS).

The first one was designed for businesses that were legally required to close in high risk sectors and parts of the country. It is called the JSS Closed though initially it was known as the expanded Job Support Scheme.

The second one is for businesses that remain open, but where employees are working reduced hours. It is called the JSS Open. It now closely resembling the CJRS which closes on 31 October. This article deals with the second scheme.

In summary

The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked.

The employee will receive 66.67% of their normal pay for the hours not worked. This will be made up of contributions from the employer and from the government. The employer will pay 5% of salary for the hours not worked, up to a maximum of £125 per month. The government will pay the remainder of 61.67%, of 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 73.33% of their normal wages, where they earn £3,125 a month or less.

The following is an illustration, including how the above amounts are calculated, assuming an employee is paid at the maximum of £3,125 under the scheme and works the new minimum of 20% of normal hours.

£125.00 £3,125 x 80% (maximum) x 5% = £125 by employer

£1,541.67 £3,125 x 80% (maximum) x 61.67% = £1,541.67 by employer

£833.33 £3,125 x 80% (maximum) x 33.33% = £833.33 lost pay by employee

£625.00 £3,125 x 20% (minimum) paid to employee

£3,125.00 Normal salary

The 'new scheme'

The Chancellor has announced a significant increase to the government support for businesses employing workers affected by the Coronavirus restrictions following complaints from businesses in tier two areas.

The government contribution under the Job Support Scheme has been doubled.

When originally announced, the Job Support Scheme, which will come into effect on 1 November 2020, saw employers paying a 33% of their employees’ wages for hours not worked, and required employers to be working at least 33% of their normal hours.

The revision reduces the employer contribution for the hours not worked to just 5%, and reduces the minimum hours’ requirements to 20%. Employees therefore need to work the equivalent of just one full day a week to be eligible.

Employees will still not be compensated for 33% of their hours not worked.

Employers will continue to receive the £1,000 Job Retention Bonus some long as they meet the criteria. The extended Job Support Scheme, for businesses that are legally required to close, will remain unchanged with the government paying 67% of employees’ usual wages, up to a maximum of £2,100

Instead of a minimum requirement of paying 55% of wages for a third of hours worked, as announced in September, as announced at the start of the Winter Economic Plan, employers will have to pay a minimum of 20% of usual hours worked, and just 5% of hours not worked.

The government will now fund 62% of the wages for hours not worked. This more than doubles the maximum payment to £1,541.75. In the most generous case, the government will now go from funding 22% of wages to just 49%.

The revised Job Support Scheme is available across the UK and not just to employees and employers in selected tiers or parts of the country.

The self-employment scheme has also been doubled from 20% to 40% of profits, with a maximum grant now of £3,750 a month.

The 'old scheme'

On 9 October 2020, announcements were made regarding these payments under the auspice of the expanded Job Support Scheme.

The Chancellor announced the details regarding a new ‘Job Support Scheme’. This will replace the 'furlough scheme' when it closes on 31 October 2020.

The government will pay part of employees' wages where employees are not able to work their usual full hours because of Coronavirus related circumstances. However, employees must work at least 33% of their usual hours to be eligible for the new Job Support Scheme.

Employees must work at least one-third of their normal hours. The government and the employer will each pay one-third of the gross pay, subject to an upper limit per employee.

What is the Job Support Scheme?

The current furlough Coronavirus Job Retention Scheme (CJRS) will not be extended beyond 31 October 2020. It is claimed that the new Job Support Scheme replace will be better targeted. The scheme will run for six months from 1 November.

In order to be eligible, employees must work at least one-third of their pre-furlough normal hours. The one-third threshold requirement will apply for the first three months of the scheme, from November 2020 to January 2021. After that date the government will review and consider whether to increase the minimum one-third of usual hour’s requirement.

Employers will be able to rotate employees in and out of the scheme. Employees will not have to work the same pattern each month. However, each period of employee working must cover a minimum work-period of seven days. Employees will not have to work one third of every week, they will be able to chop and change, as long as each period includes some work that lasts for least seven days.

The government and employer will each pay one-third of the wages for the remaining (non-furloughed) hours not worked. Employees are expected to absorb the remaining one-third of their pay. The government contribution capped at £697.92 per month per employee.

Ignoring the effect of the minimum one-third of normal hours’ requirement, employees would therefore receive 67% of their normal pay. However, once the one-third of normal hours’ requirement is taken into account, the government states that employees receive at least 77% of their normal pay.

Example one - 33% of hours worked

If an employee earns £2,000 pm, and works 33% of their normal hours, they would receive £667 of normal pay from the employer. The employee would also receive £444 from the employer and another £444 from the government i.e. £1,333 for non-working pay x one-third each. Overall, the employee would receive £1,555 i.e. 77% of their normal pay. The employer would initially pay all amounts to the employee, but would claim £444 from the government.

Example two - 50% of hours worked

The same employee is £2,000 pm, but now works 50% of their normal hours. They would receive £1,000 of normal pay. The employee would also receive £333 from the employer and £333 from the government. Overall, the employee would receive £1,666 i.e. 83% of their normal pay. The employer would claim £333 from the government.

The Job Support Scheme contribution will not cover the recovery of any associated employer’s national insurance or pension contributions.

The government's contribution to employees’ pay will therefore fall sharply when compared to the furlough scheme. Under the initial furlough scheme, the government paid 80% of pay up to £2,500 pm, though this reduced to 70% in September and then 60% in October. Under the new scheme the government’s contribution will drop to a maximum of 22%.

Under the CJRS, employers can claim around the middle of the month and have the funds from HMRC before they pay their employees. Under JSS, employers must pay their employee first, and then make a claim for the JSS. The employer will be paid the JSS grant once each month, but only after the RTI return for that week/month that reports the employee’s wages has been submitted to HMRC.

The JSS is not restricted to employees who were furloughed at some point between March and October 2020. Unlike the CJRS, the JSS will be available for employees who have recently joined the payroll, e.g. since March 2020.

To help minimise unemployment, employers will still be eligible to claim the Job Retention Bonus, of £1,000 in February 2020, for every furloughed employee that is kept in work until at least the end of January 2021 and who earns at least £520 pm in the months of November 2020 to January 2021.

Some more details under the (new) scheme (updated 22 October 2020)

To be eligible, employees must have been included on the PAYE payroll between 6 April 2019 and on 23 September 2020 and included on a RTI Full Payment Submission within that period. What about directors who are paid annually in late March? Will they be eligible for the JSS grant as they will not have been included on an RTI return for 2020/21 yet?

Employers can only claim for employees that were in their employment on 23 September 2020. If employees ceased employment after 23 of September 2020 and were subsequently rehired, then employers can claim for them.

Employees can be on any type of contract, including zero hours or temporary contracts.

Employees are entitled to the National Living Wage, National Minimum Wage or Apprentices Minimum Wage for the hours they are working or treated as working (such as training undertaken at the request of the employer in non-working hours) under minimum wage rules

The scheme is open to small and medium-sized businesses. One of the three criteria for defining these businesses is employing less than 250 employees.

An employer can claim the JSS Open and JSS Closed grant at the same time for different employees. An employer cannot claim for a single employee under both schemes at the same time.

Employees can be made redundant at any time and most probably will be entitled to redundancy pay. Redundancy pay should be calculated based on their pre-furlough wages. Employees who are already on notice for redundancy, or who have been made redundant cannot be included on a JSS claim submitted by the employer who made them redundant. Employers therefore cannot however use the funds from the new Job Support Scheme to subsidise redundancy packages.

The Job Support Scheme grant will not cover National Insurance contributions or pension contributions.

Employers must have paid the full amount claimed for an employee’s wages to the employee before each claim is made.

The first employer claims will be available online through the GOV.UK online portal from 8 December 2020 and will be one again paid to employers on a monthly basis.

Employers claiming the Job Support Scheme may still claim the Job Retention Bonus in respect of the same employee if they are eligible. Grants claimed under the Job Support Scheme can be used by employers to pay an employee’s wages and help meet the Lower Earnings Limit of the Job Retention Bonus.

The amounts to be claimed from each of the schemes (CJRS and JSS) should be calculated separately using the guidance for each scheme which will take into account the number of days that fall within each of the scheme’s timelines. No amount of gross pay should be included in more than one scheme.

If an employee is paid a weekly salary each Friday covering the previous 7 days, when they are paid on 6 November 2020 this will include their pay for the period Saturday 31 October 2020 through to Friday 6 November 2020. It will be necessary to follow the Coronavirus Job Retention Scheme guidance to calculate the claim for 1 day, being 31 October 2020 and then the remaining 6 days should be calculated following the Job Support Scheme guidance.

The maximum reference salary is £3,125 per calendar month.

Under JSS Open, employers can claim for government support for their employees’ wages up to a maximum of £1,541.75 per month i.e. £3,125 x 80% x 61.67%.

Reference salary is made up of the regular payments they are obliged to make. It does not include any tips, discretionary bonuses or commission payments, non-cash payments or non-monetary benefits like benefits in kind.

The reference salary for employees with fixed pay is the greater of:

  • the wages payable to the employee in the last pay period ending on or before 23 September 2020

  • the wages payable to the employee in the last pay period ending on or before 19 March 2020, this may be the same salary calculated under the CJRS scheme

The reference salary for employees with variable pay is the greater of:

  • the wages earned in the same calendar period in the tax year 2019 to 2020

  • the average wages payable in the tax year 2019 to 2020

  • the average wages payable from 1 February 2020 (or the employee’s start date if later) until 23 September 2020

More details, including how to calculate working and non-working hours see

See also the Expansion of Job Support Scheme now known as the JSS Closed scheme.

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