New Job Support Scheme

Updated to reflect changed to Rishi Sunak’s announced changes to JSS on 22/10/2020.

The six-month scheme will start on 1^st November 2020 and will run till 30^th April 2021.

Main Change to Scheme:

The minimum hours required for employees to work has dropped from 33% to 20% and the employer contribution for non-worked hours has dropped from 33.3% to 5%.

Eligibility:

• The scheme is open to all employers with UK bank account and UK PAYE schemes.
• All employees who were paid through the employer’s PAYE between 6^th April 2019 to 23^rd September 2020 are eligible.
• To qualify for the support an employee must have worked at least 20% of their contracted hours during the claim period.
• Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.
• The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.

How does it work:

• Companies will pay staff their full rate for the hours they do work during the claim period.
• For the hours not worked, the employer will pay 5% of an employees’ usual wages, while the government will pay 61.67%.
• The level of grant will be based on employees’ usual salary, capped at £1,541.75 per month.
• Employer contributions are now capped to maximum of £125 of not worked portion of the salary. However, employer still responsible for paying the NI contributions and Pensions.
• Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short time working arrangement must cover a minimum period of seven consecutive days.
• The employee cannot be on notice of redundancy.
• “Usual wages” calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme; however, full details will be set out by HMRC in guidance later.
• Employers will be able to make a claim online through Gov.uk from 8^th December 2020. They will be paid on a monthly basis in arrears. Meaning that claim can only be submitted after the payment to the employee has been made and payment reported to HMRC.

Summary:

• In a nut-shell employee working 20% of their normal hours would receive 73.74% of their pay.
• The cost of hours not worked will now be covered by government (through wage support), and the employee (through a wage reduction).
• Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
• Employers using the scheme will also be able to claim the Job Retention Bonus (JRB) for each employee that meets the eligibility criteria of the JRB. This is worth £1,000 per employee. Taking JSS-Open and JRB together, an employer could receive over 95% of the total wage costs of their employees if they are retained until February.