In this insight, we’ve answered the key questions you may have following the UK Government’s announcement of the new Job Support Scheme (JSS).
This new scheme is part of the ‘Winter Economy Plan’, to help support jobs and the economy over the coming months as many organisations, facing the end of the Furlough scheme, are looking to adapt their workforce. Announced by Chancellor of the Exchequer Rishi Sunak on 24th September 2020, this new scheme is designed to help employers who continue to face difficulties due to the Covid-19 pandemic, especially small to medium sized businesses (SMEs).
We’ll continue to update this page as further developments are announced.
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What you need to know about the JSS
Who is eligible?
- The JSS is intended to support businesses who are being impacted by the ongoing pandemic but who have the means to support their employees carrying out some work.
- The JSS will apply to all small and medium sized business which have seen a reduction in turnover due to the pandemic. Larger businesses however will have to meet a financial assessment test to be eligible.
When will the scheme start and how long will it run for
- The JSS will open from 1 November 2020 and employers will be able to claim online from December 2020. The grant will be paid on a monthly basis.
- The JSS will run for 6 months. The Government will reassess the scheme after the first three months and may increase the minimum hours’ threshold at that point.
What do I need to consider as an employer?
- Employers will not be able to claim in respect of employees who have been served notice of redundancy.
- Employees will be able to cycle on and off of the JSS. They do not have to be working the same pattern each month, but each short time working arrangement must cover a minimum period of 7 days.
- The employee will need to work at least one third (33%) of their normal hours and be paid for these hours by their employer. In relation to the employee’s remaining normal hours (that are not worked), the employer will then pay one third (22%) and the Government will pay one third (22%). The level of the grant will be calculated based on the employee’s usual salary, capped at £697.92 per month. This means that in total, the employee will receive 77% of their usual wages (subject to the cap).
- Employers who are eligible for the JSS will also be able to claim for the Job Retention Bonus.
Expansion of the JSS
- On 9 October, the Government announced that the JSS will be expanded to protect jobs and support businesses required to close their premises as a result of coronavirus restrictions.
- Under the expansion, firms whose premises are legally required to shut for a period over winter as part of local or national restrictions will receive grants to pay for a proportion of the wages of staff who cannot work.
- The government will support eligible businesses by paying two thirds of each employees’ salary (or 67%) up to a maximum of £2,100 per month.
- Businesses will only be able to claim the grant whilst they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
- Under the Scheme, employers will not be required to contribute towards wages but will have to cover National Insurance and pension contributions. The Government estimates that around half of potential claims will not incur employer National Insurance contributions or auto-enrolment pension contributions.
- In line with the rest of the JSS, the scheme will begin on 1 November and will be available for 6 months. Payments to businesses will be made in arrears, via an online claim service that will be available from early December.
What about the self-employed?
- There is help available for those who are self-employed through the extension of the Self Employment Income Support Scheme (SEISS).
- For those who are currently eligible for the SEISS and who are trading but continuing to face difficulties in light of the pandemic, the Government will provide a taxable grant worth 20% of average monthly trading profits. This will be capped at £1,875.
- This initial grant will cover the period from November to 31 January 2020 and a further grant, the level of which will be determined in due course, will be available for February through to the end of April 2021.
Further details regarding both the JSS and the SEISS are expected shortly and we will update this insight once new developments are announced.
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Some of our recent insight articles that may be of interest include:
- The Job Retention Scheme
- Employment Unit launches free online clinic
- When is your self-employed consultant actually an employee?