The Job Support Scheme will succeed the Coronavirus Job Retention Scheme, also known as the furlough scheme.
Initially, the furlough scheme was due to end on 31 October, but it has now been extended to the 31 March 2021 so the new Job Support Scheme is currently on pause.
It had already been revised several times before being paused. We’ve got all the details below of how it will work if the government go ahead with it.
How will the Job Support Scheme work?
The scheme can be split into two parts – JSS open (for businesses that can trade but with reduced demand) and JSS closed (for businesses that cannot even open).
Job Support Scheme Open (for employers facing decreased demand)
Employers will pay staff for the hours they do work. For the hours they can’t work, the government and employer will offer support to subsidise wages.
Initially, to qualify for the scheme employees must have worked at least a third of their normal hours but this is no longer the case. An employee now only needs to work 20% of their usual hours.
For the hours employees can’t work, they will receive 66.67% of their normal pay – made up from 61.67% from the government (up to a maximum of £1,541.75 a month) and 5% from the employer (up to a maximum of £125 a month). Employers can choose to pay more at their discretion. Previously employers were being asked to contribute a third of wages.
To put this into perspective, an employee working 20% of their hours would earn at least 73% of their usual pay – where they earn £3,125 a month or less. The amount of money supplied will be calculated based on the worker’s usual salary.
Job Support Scheme Closed (for employers who are legally required to shut)
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.
Businesses will not be required to contribute towards wages and only asked to cover NICS and pension contributions.
However they can make additional payments at their discretion.
What is the additional grant?
The government is increasing the cash grants to businesses in England both in Tier 2 and Tier 3. These grants will be linked to rateable values.
For businesses in Tier 2, cash grants of up to £2,100 a month will be payable. They can also be claimed retrospectively (back to August).
For those in Tier 3, support of up to £3,000 per month will be payable (after closure for two weeks).
All grants will be distributed via local authorities.
What would an example look like for the standard scheme?
Beth normally works five days a week and earns £350 each week, but the company she works for is making less money due to coronavirus. Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working two days a week.
Her employer pays Beth £140 for the days she works, plus 5% of the remaining three days she isn’t working (£10.50). In addition, the government will pay 61.67% of her regular salary (£120).
This brings her total earnings to £270.50, or 78% of her normal wage.
How will the money be distributed?
Employers will be able to make a claim online from December 2020. Like the furlough scheme, grant payments will be made in arrears and employers will be reimbursed for the Government’s contribution on a monthly basis.
How long will the scheme last?
The scheme was going to start on 1 November for six months – however it is currently paused as the furlough scheme has been extended.
Who is eligible for the scheme?
For businesses that are still running, it will only be available to employees who are working fewer than normal hours due to decreased demand. They will also be required to undertake a Financial Impact Test. As stated above, employees must work at least 20% of their hours.
Anyone who is in employment as Wednesday September 23, can be put on the scheme. Employees cannot be on a redundancy notice while taking part.
For businesses that are closed, they will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
All employers with a UK bank account and UK PAYE schemes can claim the grant.
Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme. Larger businesses will only be eligible when their turnover has fallen.
An employer can claim the JSS Open and JSS Closed grant at the same time for different employees. An employer cannot claim for a single employee under both schemes at the same time.
Where can you find out more information?
Details of the Winter Economy plan have been published on the Government website.
In the meantime, you can read more about the Job Support Scheme here.
