Chancellor announces new Job Support Scheme
In a speech to the House of Commons, Chancellor Rishi Sunak has announced a new scheme that is set to replace the Job Retention Scheme (JRS) as we head into the winter months.
Employers were already anxious at the furlough scheme coming to an end and were likely wondering how they would avoid making a large number of redundancies. The Chancellor’s answer is a new initiative – the Job Support Scheme (JSS). The new scheme will be available for employers from 1 November 2020 regardless of whether they have made use of the JRS or not and is set to be in place until 30 April 2021.
Under the JSS, with further clarification having been released on 22 October 2020, the Government will be able to help employers who are suffering from business downturn as a result of coronavirus restrictions or who have been told to close completely. It is separated into two provisions: JSS (Open) and JSS (Closed).
To access the JSS (Open), the following criteria will apply:
• Employees must work for at least 20% of their normal working hours – in ‘viable’ jobs – with employers covering the wages for those worked hours;
• For the hours not worked, the employer will be asked to contribute 5% of employees’ wages;
• 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.
For large businesses to qualify for the JSS (Open), they will have to meet a financial assessment test to show that their turnover is lower due to experiencing difficulties from coronavirus.
On 9 October 2020, the Chancellor first announced the expansion to the original JSS which is being referred to as JSS (Closed). 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 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 and pension contributions.
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, which means that a Real Time Information (RTI) submission notifying payment to the employee to HMRC must have been made at some point from 6 April 2019 up to 23:59 on 23 September 2020. 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.
Claims can be made online from 8 December 2020 and reimbursement will be made on a monthly basis.