On 22 October, the Chancellor announced that the Job Support Scheme will be expanded, in a move he said would protect jobs and support businesses required to close their doors as a result of coronavirus restrictions.
Additional business grants have also been confirmed, along with upgraded support for the self-employed. Visit our guide to COVID-19 funding sources for all the latest information. FSB members can contact their local representatives for guidance on local funding.
What is it?
The Job Support Scheme starts on 1 November, for six months, and will follow the Coronavirus Job Retention Scheme. It’s designed to protect jobs in businesses facing lower demand over the winter months during COVID-19.
What support is available?
There are two types of support available for businesses to help cover employment costs.
- JSS Open – if your business is operating but facing decreased demand.
- JSS Closed – if you’re legally required to close as a direct result of coronavirus restrictions anywhere in the UK.
Employers will have the option of keeping employees in a job on shorter hours, and will receive support for employment costs.
Here is a breakdown of what you would need to contribute:
- Your employee will need to work a minimum of 20 per cent of their usual hours – you will pay these wages as normal.
- Of the hours not worked, for example the remaining four days a week, two thirds (66.67 per cent) of this will be paid to the employee as a ‘reference salary’. This will be made up from both employer and government contributions. You will need to pay 5 per cent of this reference salary, up to a maximum of £125 per month.
- The government will pay the remaining 61.67 per cent of reference salary for the hours not worked, up to a maximum of £1,541.75 per month.
- As a result, your employee would continue to receive at least 73 per cent of their normal wages, where they earn £3,125 or less.
The scheme has been expanded to provide temporary support to businesses who have been legally required to close as a direct result of COVID-19 restrictions in the UK.
Similar eligibility criteria and rules apply will to this extension. Detailed guidance can be found here.
- The grant per eligible employee available from the UK Government is two-thirds of their normal pay, up to a limit of £2,083.33 per month.
- You will pay these wages as normal and then claim the money back as a grant. You must use the scheme to cover employees’ wages and pay relevant payroll taxes.
- It includes premises restricted to delivery or collection only services, or those restricted to provision of food and/or drink outdoors.
- It will cover employees whose primary workplace is at the premises that has been legally required to close, and who stop work for a minimum period of at least seven consecutive calendar days.
- You are only eligible to claim for periods during which the relevant coronavirus restrictions are in place.
JSS Closed does not cover businesses required to close by local public health authorities as a result of specific workplace outbreaks.
Am I eligible for the scheme?
To use the Job Support Scheme, either JSS Open or JSS Closed, the following eligibility criteria applies:
- UK, Channel Islands or Isle of Man bank account.
- UK PAYE scheme registered on or before 23 September 2020.
- Turnover is lower than before experiencing difficulties from COVID-19 - no financial assessment test for small businesses.
- Employees you choose for this scheme must have been on your payroll on or before 23 September 2020.
- Employees can be on any type of contract, including zero hours or temporary contracts.
- Employees can cycle on and off the scheme and don’t have to be working the same shift pattern each month, but each short-time working arrangement must cover a minimum of seven days.
Frequently Asked Questions
I didn’t use the furlough scheme; can I still use the Job Support Scheme?
Yes, all eligible employees can use the scheme, regardless of whether you have previously furloughed staff.
Will I still be eligible for the Job Retention Bonus?
Employers using the scheme will still be able to claim the Job Retention Bonus if eligible.
Can I claim both JSS Open and JSS Closed?
Yes, employers can claim for both grants, as long as it is for different employees. You can’t claim for both schemes at the same time for the same employee.
How do I claim the grant payments?
Grant payments will be made in arrears, much like the first furlough scheme, and employers will be reimbursed.
Employers will be able to make their first claim online through GOV.UK on 8 December 2020, covering salary for pay periods ending and paid in November. You will be able to claim on a monthly basis. Claims can only be submitted after payment has been reported to HMRC via an RTI return.
Do I still need to pay pensions and employer NICs?
Yes. The grant does not cover Class 1 employer NICs or pensions contributions. You must still make these payments unless the employee has opted out.
What is meant by ‘usual wages’?
The calculations you’ll need to make for your employee’s usual wages will be similar to the furlough scheme. For those who have been furloughed, you must use their usual pay or hours, not the amount that they were paid whilst on furlough.
Will employers be expected to top up employees wages?
There is no expectation that employers will top up their employees’ pay, but you can do if you wish.
Can I make an employee redundant during the scheme?
No, you can’t make an employee redundant or give notice of redundancy during the period when you’re claiming the grant for that employee.
If you think you need to consider redundancies, you can read our guide here to carrying out redundancies in a legal and compassionate way.
Do I have to create new employment contracts?
To be eligible for the grant, you must agree to the new short-time working arrangements with your staff, make any changes to the employment contract by agreement, and notify the employee in writing.
This agreement must be made available to HMRC on request. HMRC will publish further guidance on what to include in the written agreement.
Our guide to changing employment contracts walks you through the process. FSB members are strongly advised to contact our employment protection helpline before taking any action, to ensure you follow the right processes and stay on the right side of employment law.
Further guidance on the scheme is expected to be published at the end of October.
For the latest advice and guidance for small businesses and the self-employed during this time, visit our coronavirus hub.