Job Support Scheme replaces Furlough

Rather than continue with the coronavirus job retention scheme the Chancellor has announced a new scheme to subsidise employees continuing to work part of their normal hours. The Job Support Scheme (JSS) will operate for six months from 1 November to 30 April 2021.

The JSS will be open to all employers with a UK PAYE scheme and bank account but, to be eligible, large companies must be able to prove that they are still suffering a significant drop in turnover as a result of the pandemic. It is confirmed that this is a stand-alone scheme - there is no requirement for the employer or employee to have participated in the CJRS prior to 1 November and employers can claim under both the JSS and the Job Retention Bonus Scheme. As this is a new scheme, all employees on the payroll at 23 September 2020 can qualify for JSS.

The scheme is intended “To support viable UK employers” so employers can only claim the JSS subsidy for all employees that work at least 33% of their normal contractual hours during the claim period. This ‘viability’ test applies for the first three months of the scheme but the government may adjust the working hours threshold for claims covering February to April 2021.

The subsidy from the government will be up to 33% of the employee’s usual wages (calculated as under CJRS and up to a maximum of £697.92 per month) for the contractual hours not worked during the claim period. Employers will be required to match this payment in percentage terms as well as pay employers’ NIC and pension contributions on the total salary payment. In total, this will guarantee employees a minimum income of 77% of their normal earnings during the claim period with employers meeting at least 55% of the normal wage costs plus the NIC and pension contributions. Employer top-up payments for hours not worked will not be permitted.

The scheme is flexible (similar to the flexible CJRS scheme) in that employees can be added and removed at any time, to allow them to resume full time work for a busy period and then go back into JSS when their working hours drop. However, periods of short time working (and related JSS claims) must be for a minimum seven day period and they must be formally notified to the employee and documented properly so that HMRC can check the records after a claim.

There will be several restrictions placed on employers who use the JSS. Large companies making claims under the scheme will be prevented from making certain payments (such as dividends to shareholders or capital distributions) while the scheme continues. Similarly, any employer cannot claim for an employee who is on notice of redundancy or make an employee redundant during a claim period.

It is expected that a new claims portal will open during December but employers should note that the JSS subsidy will be paid monthly in arrears after the relevant RTI payroll submission for the month. Therefore, employers will only be able to claim reimbursement after they have made wage payments to employees. This is less helpful for an employer’s cash flow than the current CJRS but should help to reduce the likelihood of incorrect claims being made. It is expected that HMRC will check JSS claims against RTI records and investigate discrepancies.

4 views0 comments