Job Support Scheme Postponed

Please note that the Job Support Scheme, which was due to commence on 1 November 2020, was postponed as a result of the government’s decision to extend the Coronavirus Job Retention Scheme until December.

Last week, Chancellor of the Exchequer, Rishi Sunak, announced changes to the upcoming Job Support Scheme (JSS), which will mean greater savings on staff costs for employers using the scheme.

Initially revealed in September, alongside a selection of grants for businesses in areas heavily impacted by coronavirus restrictions, the JSS was intended to replace the Coronavirus Job Retention Scheme (which expires at the end of October).

In its original form, qualifying companies that accessed the scheme could rely on government support to pay the wages of employees that were working at least 33% of their normal hours. The government would then pay 33% of their wages for unworked hours, whilst employers were required to pay 33% of wages for unworked hours.

However, the government’s changes published last week revealed important updates and clarifications that employers should take note of.

What are the key changes?

  1. The amount of hours that an employee is required to work in order to use the scheme has been reduced from 33% to 20%.
  2. The percentage of wages that employers are required to cover in respect of unworked hours has been reduced from 33% to 5% (up to a cap of £125 per month)
  3. The percentage of wages that the government will cover in respect of unworked hours has consequently increased to 61.67% (up to a cap of £1,541.75 per month)

This means that an employee who works 20% of their normal hours can receive up to 73% of their normal full pay, comprised of 20% as pay for hours worked, 4% in employer contributions under the JSS, and 49% in government contributions under the JSS.

It is worth noting that the government has now clarified that employers can contribute more that the 5% indicated above if they wish to give their employees a great overall proportion of their full salaries. However, the government contribution is fixed at the above percentage and cap.

Is there more information on which individuals are eligible for the JSS?

The government also released a policy paper alongside its announcement which provided more details of eligibility criteria, conditions and timescales for the JSS (including the separate scheme for businesses that have been forced to close).

Some of the additional eligibility details included:

  • Only employees in employment and on the PAYE payroll on or before 23rd September 2020 can be claimed for under the JSS.
  • If an employee left employment after 23rd September 2020 but was subsequently re-employed, employers may claim for them.
  • Individuals qualifying as “employees” for the purpose of the JSS if they are classed as employees for Income Tax purposes
  • Employees on any style of contract can be included, even fixed-term contracts or zero-hours contracts.

How long will the scheme run for?

The scheme is set to operate from 1st November 2020 for six months, subject to a review by the government in the New Year. Employers will be able to submit claims through a dedicated government web page due to open from 8th December 2020.

Government contributions will be paid monthly in arrears reimbursing the employer. This means that a claim under the JSS can only be submitted once the employee has been paid, which could lead to cash flow problems for some employers in a difficult economic climate (access to other grants and loans available for businesses may help such employers, however).

The full government policy paper with details of the scheme can be viewed here.

For more information, we covered the key details of the JSS as announced in September here. The government also announced an extension to the JSS on 9th October specifically for business that are required to shut as part of government coronavirus restrictions, which you can read more about here.

Employers are advised to monitor and keep up to date with details of the Scheme as further details are expected. A separate support scheme will be put in place for the self-employed. You can reach our Employment Team for further guidance on 0161 941 4000 or via email.