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Job Support Scheme

/ 22 October 2020

Daniel Shear

Updated: 3 March 2021

Job Support Scheme – Open

The most headline-grabbing announcement of the Chancellor’s Winter Economy Plan in September 2020, and updated by his announcement on 22 October 2020, was the introduction of the new Job Support Scheme (JSS). It was intended come into effect after the Coronavirus Job Retention Scheme (CJRS) ends.

JSS was due to run from 1 November 2020 to 30 April 2021. Since announcing JSS, the government has extended CJRS until 30 September 2021. This makes the status of CJRS uncertain, until the government clarifies its post-CJRS plans.

Below are the details of CJRS as previously announced, and subject to change:

Under JSS, employees who work at least 20% of their hours will be paid for two-thirds of the hours they do not work – the government will pay most of the hours not worked, with the employer paying just 5% of the hours not worked. The goal is to protect viable jobs in businesses that are facing lower demand over the winter months due to coronavirus.

How the scheme will work

Employees will need to work a minimum of 20% of their usual hours. For every hour not worked the government will pay 61.67% of the hours not worked, up to a maximum of £1,541.75 per month, and the employer will pay 5% of the hours not worked. This means employees will receive at least 73% of their pay, where the government contribution has not been capped.

The employer will be reimbursed in arrears for the government contribution.

Eligibility for JSS: employers

JSS was never meant to replace, or represent an extension of, CJRS. Indeed, employers who did not take advantage of CJRS will still be eligible for JSS.

JSS is open to all employers with a UK bank account and a UK PAYE scheme. All small and medium-sized enterprises (SMEs) will be eligible, with no financial assessment required.

Large businesses will be required to demonstrate that their business has been adversely affected by coronavirus, such as demonstrating a reduction in turnover or having to close their premises. They will also be restricted from making capital distributions to shareholders.

Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify each employee in writing.

Use of the JSS will not impact on employers being able to claim the Job Retention Bonus, as long as they meet its eligibility criteria (details on our CJRS page).

Eligibility for JSS: employees

Employees must have been on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.

The ‘minimum hours threshold’, i.e. the requirement for employees to work a minimum of 20% of their usual hours, may change when the government reviews JSS next February, at the scheme’s halfway point.

Employees will be able to ‘cycle on and off’ JSS. They don’t have to be working the same pattern each month, as long as each short-time working arrangement covers a minimum period of seven days.

The employee must not be on a redundancy notice.

More details are due to be announced before JSS launches.

Job Support Scheme – Closed

As announced in October, JSS has been expanded to support businesses required to close their premises due to coronavirus restrictions.  The government will pay two thirds of each employee’s salary, up to a maximum of £2,100 per month.

Employers will be reimbursed in arrears, and are responsible for any employer’s NIC and pension contributions due on these payments.

For more information on how we can help businesses during the coronavirus pandemic and beyond, please get in touch using our enquiry form.

Daniel Shear

Partner, Corporate Finance

T +44 (0)20 8922 9321
E daniel.shear@bkl.co.uk

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