The Chancellor originally announced details of the new Job Support Scheme (JSS) in his Winter Economy Plan, but the details have since been updated in a statement on 22 October 2020.
The JSS is the main employment support scheme from 1 November 2020, following the cessation of the Coronavirus Job Retention Scheme (CJRS). The scheme will run for six months, until April 2021.
There is no need for the employee to have been previously furloughed before 1 November 2020, or for the employer to have claimed under the CJRS.
The primary purpose of the scheme is to support workers in viable jobs in businesses who are facing lower demand over the winter months due to Covid-19. It is hoped that by helping employers top up wages during the most difficult months, more employees will be able to stay in work.
When originally announced, the JSS saw employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours. However, on 22 October, the Chancellor announced that the employer contribution to those unworked hours is reduced to just 5%. The minimum hours requirement has also been reduced to 20%, so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.
There are two main qualifying conditions to be met before a claim can be made:
Employees must have been on the employer’s payroll (and a Real Time Information (RTI) return must have been submitted which included payment made to that employee) on or before 23 September 2020.
Employees must also be working at least 20% of their normal working hours. The government will review this condition after three months.
There is no requirement for the employee to work a fixed pattern and unworked hours may change from week to week. However, each short-time working arrangement must cover at least seven days.
Employers should ensure all working agreements are made and agreed with employees in writing and that adequate evidence is retained. HMRC have confirmed that they will be incorporating checks into the claims process and employers may need to provide evidence of short time working arrangements.
Employees cannot be made redundant or put under notice of redundancy during the period for which the employer claims a grant.
Financial assessment test
All UK employers can use the scheme as long as they have a UK bank account and UK PAYE scheme.
Large businesses will also need to satisfy a ‘financial assessment test’, under which they will have to demonstrate that their turnover is lower than it was as a result of Covid-19.
For small and medium sized businesses (SMEs) there are no additional conditions.
The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month. The cap is set above median earnings for employees in August 2020 at a reference salary of £3,125 per month.
The government will reimburse grant payments to employers in arrears.
Grants do not cover Class 1 employer national insurance contributions (NICs) or pension contributions. These contributions will remain payable by the employer.