• The Chancellor has unveiled the Job Support Scheme (JSS) in anticipation of the current furlough scheme finishing at the end of October.

    An extension to the Self-Employment Income Support Scheme has also been announced.

    The Job Support Scheme

    The intention behind the scheme is clear from its name – the government hopes that it will help to protect what it terms ‘viable’ jobs over the winter and avoid job losses and redundancies when the furlough scheme ends.

    At the time of writing, we are awaiting further guidance from the government on the scheme mechanics, but the key details released so far are detailed below. These include updates released on 22 October 2020.

    What is it?

    A scheme designed for employees to receive at least 73% of their normal wages, subject to a cap on government contributions. For an employer to claim from the scheme, employees cannot be made redundant or put on notice of redundancy while the grant is being claimed. Further guidance on what that means in practice is expected to be released shortly.

    How does it work?

    When the Job Support Scheme was originally announced, employees needed to work a minimum of 33% of their usual hours to qualify. However, after Rishi Sunak’s latest amendments on 22 October, employees will only need to work a minimum of 20% of their usual hours. For those hours worked, employers will be responsible for paying the employee their usual wages.

    For hours not worked (a maximum of 80%), the employee will be paid two thirds of their usual hourly wage consisting of:

    • 62% of their wages being paid by the government (up to a cap of £1541.75) per month.
    • 5% of their wages by the employer.
    • One-third will be forfeited by the employee.
    • This means employees will receive at least 73% of their usual pay for working a minimum of one fifth of their usual hours.
    • Employers will remain responsible for paying employer National Insurance and pension contributions and payments under the JSS will be made monthly in arrears.

    As with the furlough scheme, there is some flexibility to bring employees on and off the JSS. Each short time working arrangement must cover a minimum pay period of seven days, but employees will be able to work different patterns in different pay periods.

    Length of the scheme

    The scheme will open on 1 November 2020 and continue for six months, until April 2021.

    Eligibility for the Job Support Scheme

    Employers can claim under the scheme if they have a UK bank account and UK PAYE scheme. Employers or employees do not need to have previously used the furlough scheme in order to claim the grant.

    Employees must have been on the PAYE payroll on or before 23 September 2020 to qualify. SMEs do not need to need to undergo any financial assessment to access the grant, but large businesses will have a higher bar and must demonstrate through a financial assessment test that their turnover has been adversely affected by COVID-19. If the test is met, and the grant claimed, large businesses will be expected not to make any capital distributions (such as dividend payments) while accessing the grant.

    Employers are required to agree the short time working arrangements with employees and confirm the changes in writing. The government has also confirmed that employers using the JSS will also be able to claim the Job Retention Bonus if they are eligible.

    What next?

    Further guidance about the Job Support Scheme is awaited to clarify some initial questions raised by the government’s announcement. These include how ‘usual hourly wage’ and SMEs will be defined for the purpose of the scheme and what will happen to payments made under the scheme if redundancies are made.

    Although further details are needed, employers will need to start thinking about whether to utilise the scheme when it comes into effect on 1 November, and whether this will be for all, or just some jobs. Employers will also need to consider how they will obtain employee consent, and what form of written agreement will be used to record the arrangements.

    Self-Employment Income Support Scheme

    In parallel to the JSS, the government has also announced an extension to the Self-Employment Income Support Scheme. Eligible self-employed people will receive two grants between November 2020 and April 2021 if they are actively trading but have been impacted by a reduced demand caused by coronavirus.

    The structure of the grant will be:

    • A taxable grant covering 40% of average monthly trading profits for the period 1 November until 31 January (capped at £3,750 in total)
    • A second grant covering the period from 1 February until the end of April. The level of this grant will be set soon.

    If you have any questions on the schemes, please contact our Employment team. Employers can also book a free 30-minute appointment to discuss your needs and how we could support you.

    Can we help?

    Take a look at our Employment & HR page for useful information, resources, guidance, details of our team and how we may be able to help you

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