Job Support Scheme – What You Need to Know

Year Published: 2020

The Government has announced the creation of the Job Support Scheme (JSS), divided into JSS Open and JSS Closed, to protect jobs in businesses that may face lower demand over winter due to the impact of COVID-19. The hope is that employers will utilise the scheme as an alternative to making redundancies, so that businesses can continue to operate once the economy starts to improve.

This new scheme will be slightly more targeted than its predecessor and is aimed at small and medium enterprises who need more time to recover but can still offer some work to their employees. The scheme runs from 1 November 2020 for six months until 30 April 2021. All employers with a UK bank account and UK PAYE schemes can claim the grant. However, rather interestingly, neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme to qualify for this scheme.

How Does the Job Support Scheme Work?

Eligible employers will be able to claim the Job Support Scheme grant for employees who were on their PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020.

The employee must work at least 20% of their usual hours and the employer will continue to pay them as normal for the hours worked. Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government. The employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish. The government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month. The scheme can be used flexibly and employees do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.

What is JSS Closed?

The JSS Closed scheme will help support the wage costs of employees who have been instructed to cease work in eligible (closed) premises. Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish.

The Job Support Scheme grant will also not cover National Insurance contributions (NICs) or pension contributions. These contributions remain payable by the employer. Employers must deduct and pay to HMRC income tax and employee NICs on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant.

Employers and Employees must also continue to pay pension contributions in accordance with the applicable pension scheme terms, unless the employee has opted out or stopped saving into their pension.

The most notable point for employees is that they cannot be made redundant or put on notice during the period within which their employer is claiming the grant for that employee. Only time will tell if this scheme is enough to ensure the protection of jobs in the long term.

The Government has produced full guidance on this new scheme which can be found here.

For advice on Employment related matters, please contact Charlie Wood, Associate, on 0161 475 7673 or email [email protected].

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