The new Job Support Scheme (JSS) will come into effect from 1st November 2020, following the closure of the current Flexible Furlough Scheme on 31st October 2020.
When originally announced, the JSS saw employers paying 33% of their employees’ wages for hours not worked and required employees to be working 33% of their normal hours.
Today’s announcement from the government reduces the employer contribution to those unworked hours to just 5% (instead of 33%) and reduces the minimum working hours requirement to 20% (rather than 33%).
The key points regarding the Job Support Scheme are:
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- The scheme will run for six months from 1 November 2020 (ie to end of April 2021) and is open to all employers with a UK bank account and a UK PAYE scheme.
- The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme. All Small and Medium-Sized Enterprises (SMEs) will be eligible; large businesses will be required to demonstrate that their business has been adversely affected by COVID-19 and the government expects that large employers will not be making capital distributions (such as dividends), while using the scheme.
- To be eligible, employees must have been on the employer’s PAYE payroll between 6 April 2019 and 23:59 on 23 September 2020.
- Employers will continue to pay the wages of staff for the hours they work.
- In order to support only viable jobs, employees must be working at least 20% of their usual hours.
- Working patterns can vary, but each short-time working arrangement must cover a minimum period of seven consecutive days.
- Employers will pay 5% of the employee’s usual wages for non-worked hours, capped at £125 per month and NICs and automatic enrolment pension contributions in full as a contribution. Employers can top up employee’s wages above the 5% contribution at their own discretion.
- The Government will contribute 61.67% of the employee’s usual wages for non-worked hours, capped at £1,541.75 per month.
- “Usual wages” calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme. Full details will be set out in guidance from the government shortly. Employees who have previously been furloughed will have their underlying usual pay and / or hours used to calculate usual wages, not the amount they were paid whilst on furlough.
- Employers will be able to make a claim online through Gov.uk from 8 December 2020. They will be paid on a monthly basis.
- Grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.
- Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee. (That is in contrast to the position under the Flexible Furlough Scheme, where the scheme did pay out for employees working their redundancy notice).
- The Government will review the scheme in the new year.
- Employers must agree new short-time working arrangements with their staff, make any changes to the employment contract by agreement and notify the employee in writing.
- Eligible employers will still be able to claim the £1,000 Job Retention Bonus between 15 February 2021 and 31 March 2021. Details of how to claim will be provided by the end of January 2021, with the latest scheme information being available here: https://www.gov.uk/guidance/check-if-you-can-claim-the-job-retention-bonus-from-15-february-2021