27 October 2020    |    corona virus

JSS – the new Job Support Scheme

Key points of the new JSS

!!! As at 27 October, in Scotland, you will only qualify for JSS Closed if the area is in Tier 4 (which is Tier 3 in England).

JSS scheme background

Following the launch of the scheme in late September, the final form of the scheme has just been announced.

The generosity of the scheme has increased to account for the extra pressure on employers.  Consequently, the Government is renaming the scheme ‘JSS Open’ for businesses in Tiers 1 and 2 that remain open and ‘JSS Closed’ for businesses in Tier 3 that have to close.

JSS Open

To be eligible, an employee must work a minimum of 20% of their usual hours; this has been reduced from the higher level of 33%. Employers are to pay the contracted wage for these worked hours.  The employer will pay for the hours not worked, at a rate of 5% of the usual wage capped at £125 per month; with the Government funding 61.67% of the usual wage via the JSS capped at £1,541.75 per month. These caps mean the maximum reference salary will be £3,125.

As an example, an employee with a usual monthly wage of £1,000, will be paid:

  1. £200 by their employer for the 20% of hours worked (ie. 20% of £1,000)
  2. £40 by their employer for 5% of the hours not worked (ie. 5% of £800)
  3. A further £493.36 by the Government for 61.67% of the hours not worked (ie. 61.67% of £800)

This provides a total of £733.36, so the employee will receive a minimum of 73% of their usual wage if this doesn’t exceed £3,125. Employers must have a UK bank account and a UK PAYE scheme, and there is no requirement to have used the Coronavirus Job Retention Scheme (CJRS) previously.

JSS claim conditions

Closed by law? Only then can you claim JSS.

JSS Closed

The scheme has been extended for businesses that are in the Tier 4 [Scotland] or Tier 3 [England] areas, on very high risk alert.  Your business will qualifying if it closes for a temporary period because of regional or national restrictions.

The Government JSS grant will cover two-thirds of a worker’s usual wages where they are not able to work due to their employer having to close. There is a cap at £2,083.33 per month. Employers have to fund the employers’ national insurance and pension contributions.

Where the employer has been legally required to close and the employee is not able to work, then the employee is an eligible employee. This will need to be the case for a minimum period of seven consecutive days.

Further considerations

The usual wage or reference salary

This should only include an employee’s regular contractual payments; any discretionary payments and non-cash payments and benefits are to be excluded.

For employees who receive a fixed salary, their reference salary for JSS will be the higher of

For employees who receive variable pay, their reference salary will be the higher of

For employees who work fixed hours, their usual hours will be the higher of

For employees who work variable hours, their usual hours will be the higher of

Employers costs

As before, all employers are responsible for the national insurance or pension contributions, as they are excluded from the Government JSS grant. A further important restriction is that employers will not be able to make employees redundant or issue redundancy notices to employees whilst they are on the Job Support Scheme.

Employers will be able to make claims online from 8 December 2020, on a monthly basis in arrears, once an RTI submission has been made.

The scheme is complex as one would expect.  We expect that further information is going to be announced nearer to 1 November. Once more guidance is provided we will provide further updates.  We will help you with questions you may have or provide any further information or support.

Disclaimer

The information provided is for general information purposes only.

Legislation and details may have changed since this was written.  The text may not include all matters that are relevant to your individual situation.

You should not make decisions, or refrain from making decisions, without taking further professional advice about your specific circumstances.

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