So, the Government have responded to calls for additional support, following closure of the unprecedented ‘Coronavirus Job Retention Scheme (CJRS)’ at the end of October 2020, and have released preliminary information on their new ‘Job Support Scheme (JSS)’.
The JSS is aimed at protecting viable jobs in those businesses facing lower demand over the coming months, due to the impact of Covid-19; providing financial support on their road to recovery.
When is the Scheme Available, and for How Long?
The JSS will be in place from 1st November 2020 and is currently intended to run for a period of six (6) months, ending 30th April 2021.
With the JSS, the Employer will be responsible for paying the employee their contracted wage for any time worked, with the remainder of their normal working hours being funded equally by the Government, Employer and the Employee, based on their usual pay. The Government contribution will be capped at £697.92 per month.
Initially, and at least for the first three (3) months of the scheme, the employee must work a minimum of one third (1/3) of their normal working hours, meaning they will receive no less than 77% of their normal pay, where the Government contribution has not been capped. After 3 months, the Government may increase this minimum hours threshold.
It is expected that employers cannot top up their employees’ wages above the two-thirds (2/3) contribution to hours not worked, at their own expense.
The following is an example of how the funding will work;
The employee works two (2) of their five (5) normal working days (amounting to 40%) which the employer pays for. This leaves a balance of three (3) days (60%). The 60% is then split 3-ways, with the employer, the JSS, and the employee each covering 20%. In total, the employer is therefore paying 60% of the employee’s normal wage (40% for time worked, plus 20% of the remaining hours).
The employer remains liable for Class 1 employer NICs and pension contributions which cannot be claimed via the grant.
As is the case with Flexible Furlough, employers will be able to rotate use of the scheme for individual employees and amend the working patterns in line with business needs, however, each period of ‘short-time working’ must be for at least seven (7) days.
Employers who access the JSS will still be able to benefit from the Job Retention Bonus, if they meet the eligibility criteria.
Which Businesses will Benefit from the JSS?
The scheme will most likely benefit those employers who are using ‘Flexible-Furlough’ currently, as the new scheme provides funding to support roles that have reduced work volumes, however, neither the employer nor the employee needs to have previously used the CJRS. For those who are unable to provide any working hours to employees, there will be no further assistance for ‘lay-off’ beyond 31st October 2020.
The grant is available to employers of all sizes who have a UK bank account and UK PAYE scheme, however, for large businesses, the funding will be subject to a financial assessment test, evidencing that their turnover is lower now than before they were experiencing difficulties from Covid-19. There is also an expectation that, when accessing the scheme, large employers will not be making capital distributions (dividend payments, share buybacks etc). There will be no financial assessment test for small and medium enterprises (SMEs).
Which Employees are Eligible?
To be eligible for the scheme, an employee must have been on an employer’s PAYE payroll, on or before 23rd September 2020, meaning a Real Time Information (RTI) submission notifying payment to that employee, must have been made to HMRC on or before this date.
Claiming the Grant
Grant payments will be made on a monthly basis, in arrears, reimbursing the employer for the Government’s contribution. Employers will be able to make a claim online through Gov.uk from December 2020.
“Usual wage” calculations will follow a similar methodology as the CJRS with full details to be set out in guidance shortly. Employees previously furloughed, will have their underlying usual pay and/or hours used for this calculation, not the amount they were paid whilst on furlough.
Requirements and Conditions
As is the case with the CJRS, employers must agree the new short-time working arrangements with their employees and where necessary, make any changes to the employment contract by agreement; notifying the employee in writing. This agreement must be made available to HMRC on request.
Employees cannot be made redundant or, put on notice of redundancy, during the period for which their employer is claiming the grant for them.
Please note that at this time, further guidance is yet to be published on the Job Support Scheme.
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