The Chancellor announced on 24th September that the Job Retention Scheme is changing to the Job Support Scheme (JSS).
This is to support individuals and businesses during the challenges created by coronavirus. It should allow employers to retain their employees in the event of less demand, or a mandatory shutdown.
The JSS will be split into two divisions, being the JSS Open and the JSS Closed.
Under JSS Open, an employee will be required to work at least 20% of their normal working hours. For this, they will receive their normal wages.
The employee will be paid two thirds of the remaining unworked hours. The government have promised to pay 61.67% and this will be capped at £1,541.75.
Employers must pay 5% of the salary, along with National Insurance and pension contributions.
JSS Closed will relate to businesses that have been ordered to close by the government. For example, pubs or bars that do not serve food in Tier 3 areas.
Under this, employees will receive two-thirds of their normal wages.
This will be subsidised by the government and will be capped at £2,083.33 per month.
As with JSS Open, employers must pay NI and pension contributions on that amount.
Regarding both schemes:
- Employers are welcome to top up wages beyond the amounts provided for in the scheme.
- All small or medium sized businesses with less than 250 employees are eligible for the scheme.
- Large businesses are eligible if their turnover has fallen because of COVID-19 and this can be verified by their VAT returns.
- The government will discourage, but not prohibit, a large business from claiming on the JSS if it is making capital distributions, such as dividend payments.
- Employers will claim in arrears for salary monies already paid. The first claims can be made from 8th December 2020 and claims will be made via an online portal.
- Employers will be unable to claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.
- There must be written agreements between employer and employee agreeing to the changes.
To calculate the amount of pay: for employees who are paid a fixed salary, the ‘Reference Salary’ is the greater of:
- The wages payable to the employee in the last pay period ending on or before 23rd September 2020
- The wages payable to the employee in the last pay period ending on or before 19th March 2020, this may be the same salary calculated under the CJRS scheme
For those who receive variable pay, the ‘Reference Salary’ is the greater of:
- The wages earned in the same calendar period in the tax year 2019 to 2020
- The average wages payable in the tax year 2019 to 2020; or
- The average wages payable from 1st February 2020 (or the employee’s start date if later) until 23 September 2020
Job Retention Bonus Scheme
The government have also introduced a Job Retention Bonus Scheme. This is a £1,000 one-off taxable payment to the employer, for each eligible employee that was furloughed and kept continuously employed until 31st January 2021.
The employer must have paid a salary of at least £1,560 to the employee between 6th November 2020 and 5th February 2021.
A claim for the bonus needs to be presented between 15th February and 31st March 2021.