The Job Support Scheme (JSS) will open on 1 November and run for six months, until 30 April 2021. The government has said it will review the terms of the scheme in January 2021. There are two variations to JSS – JSS Closed and JSS Open.
JSS Closed is the original scheme designed for businesses that are legally required to close.
JSS Open is the latest scheme introduced by the Chancellor on 22 October for businesses that remain open but with employees working reduced hours.
The schemes may be used by the same business concurrently for different employees if it has premises in different areas, some of which are completely closed. A business could also move between the two schemes as the restrictions for the area it operates in change.
"As the Coronavirus Job Retention Scheme (CJRS) comes to a close it is being replaced by ever more complex and nuanced schemes. It's really important that employers understand what they can and can't do to take advantage of the schemes and the level of detail they will need to understand to correctly pay staff and make claims. Proper records of communications should be kept to support claims and defend against any future HMRC enquiries. The calculations of claims are even more complex than before and advice should be sought."
JSS Closed will provide support to businesses whose premises are legally required to close as a direct result of coronavirus restrictions set by one of the four governments of the UK; such as under the tier 3 restrictions in England. This includes premises restricted to delivery or collection-only services from their premises, and those restricted to providing food and/or drinks outdoors even if located in a restricted area.
For JSS Closed, the UK government will fund two thirds of employees’ usual wages for time not worked, up to a maximum of £2,083.33 per month. Employers will not be required to contribute, but they can top up the government’s contribution if they choose to. Employers will still need to cover all employer National Insurance and pension contributions.
The employee must give up one third of their wages and will have to agree to that change in their employment contract in writing if they are not already on a zero hours contract.
Example 1: Con and JSS Closed
Con is employed by Fused Ltd, on a salary of £32,000 or £2,666.67 per month. Fused Ltd is closed as it is located in a tier 3 zone.
Fused Ltd can claim for two thirds of Con’s monthly salary (£1777.78) under the JSS Closed. Fused Ltd will also have to pay the employer’s NIC on that salary plus the minimum employer’s contribution to their workplace pension (if Con has not opted out of that scheme).
Con will receive £1777.78 before tax and NIC deductions, which is two thirds of his normal salary.
JSS Open will provide support to businesses that are open where employees are working shorter hours due to reduced demand. Employees will need to work at least 20% of their usual hours (defined as per the CJRS) which would amount to one day of a normal five-day working week.
Employers will continue to pay employees for the hours they work at their agreed reference salary, and the UK government will pay a contribution of 61.67% of the usual pay for hours not worked, up to a maximum of £1,541.75 per month.
Employers will pay 5% of the usual pay for hours not worked, up to a maximum of £125 per month, and can top this up further if they choose. This means employees should receive at least two thirds of their usual pay for hours not worked.
Employers will need to cover all employer’s National Insurance on all of the wages plus any employer’s minimum contribution to a workplace pension.
An employee who works for 20% of their contracted hours will receive:
- 20% of pay for worked time
- 4% (5% x 80%) of pay for non-worked time, capped at £125 per month
- 49.33% of pay (61.66% x 80%) for non-worked time, capped at £1541.75 per month
In total the employee receives 73.33% of their pay and foregoes 26.67% of their normal pay.
Example 2: Em and JSS Open
Em is employed by Ployee Ltd on an annual salary of £36,000, or £3,000 per month. In a normal month she would work 225 hours, which is £13.33 per hour.
Em has agreed to work 45 hours per month for £600. To qualify for the JSS Open, Ployee Ltd must pay Em for 5% of her remaining normal hours: £120 (9 x £13.33). The JSS grant should cover the cost of 61.67% of the total 180 non-working hours: £1,479.63 (111 x £13.33).
Em receives pay of £2,199.63 (600 + 120 + 1,479.63), which is 73.33% of her normal pay.
Ployee Ltd must bear the cost of £720 (600 + 120), plus the employer’s NIC on the full amount paid of £2,199.63 and any relevant workplace pension contributions for Em.
The caps are reduced according to the proportion of hours not worked. Further guidance on this will be available on GOV.UK shortly.
JSS common conditions
The twin JSS grants schemes will run from 1 November 2020 to 30 April 2021, with the conditions to be reviewed in January 2021. The employer need not have claimed under the CJRS to use either JSS. Publicly funded bodies are not expected to use either JSS.
The other conditions for both JSS are as follows:
- The employer must have a UK, Isle of Man or Channel Island bank account
- The employer must use PAYE online
- Only payments to eligible employees qualify for the grants (see below)
- Large businesses are strongly discouraged from paying dividends or returning capital to shareholders while using the scheme.
Which employees are eligible?
The factsheet says employees must be on the payroll of the employer between 6 April 2019 and 23 September 2020 and included on at least one RTI return in that period that was submitted before midnight on 23 September 2020. This implies the employee does not have to be employed for that entire period, and employment at some point in the period would qualify.
The gov.uk guidance says the employee must be employed on 23 September 2020. But if the employee has been made redundant since that point and rehired (implied by the same employer), they are an eligible employee.
Any person who is taxed as an employee is an eligible employee for JSS, which would include contractors subject to IR35 and agency workers.
Employers or their agents will be able to make their first JSS claim in arrears from 8 December, for pay periods ending and paid in November; although the first claim period can’t start before 1 November 2020. Where the pay period straddles 1 November 2020, separate claims will have to be submitted under CJRS and JSS.
The claims must be made for minimum seven-day periods, but employees can cycle in and out of the JSS Open and do not have to work the same pattern each month.
A claim can’t be submitted for a particular employee until that employee’s wages have been paid and reported under RTI. This is to reduce fraud, but means the employer has to fund the entire payment to the employee in advance.
Further detailed guidance on how to make claims under either JSS will be published shortly.
Employees will be able to check if their employer has made a Job Support Scheme claim on their behalf through their online Personal Tax Account. Employees can set up a Personal Tax Account on GOV.UK, by searching 'Personal Tax Account: sign in or set up'.
HMRC will publish the names of the employers which use either JSS Closed or JSS Open.
Job Retention Bonus (JRB)
Employers or their agents will be able to claim a one-off payment of £1,000 for every eligible employee you furloughed and claimed for through the Coronavirus Job Retention Scheme (CJRS), kept continuously employed until at least 31 January 2021 and who meets the other eligibility criteria. Employers do not have to pay this money to their employee.
Employers or their agents will be able to claim the bonus between 15 February and 31 March. To do this you must have submitted PAYE information for the period up to 5 February 2021 on time.
Further information on eligibility and when you can claim can be found on GOV.UK by searching 'Job Retention Bonus Guidance' and further guidance on the claim process will be published by the end of January 2021.
Coronavirus Job Retention Scheme – closes on 31 October
Please note that this scheme closes on 31 October and employers will need to make any final claims on or before 30 November. Employers will not be able to submit or add to any claims after 30 November.