Chancellor Rishi Sunak has announced today (Thursday 22nd October 2020) a revised version of the Job Support Scheme which is still planned to come into effect on the 1st November and which is now being branded as the “Job Support Scheme (JSS)” or (as the Chancellor has noted on his own Facebook page) the “Open Job Support Scheme”. This is not to be confused with the “Job Support Scheme Closed“… more on that one at the end!
What’s changed?
Before: The original JSS had employees receiving 77% of their wage for working 1/3 of their normal hours and the Government and the Employer (through some complicated maths equations) paid the difference.
Now: Employees “will take home at least 73% of their pay for working 20% of their normal hours” with the Employer contributing 5% and the Government contributing 61.67% up to a new Government threshold of £1541.75
The Plan for Jobs update does give an example but not the ‘working out’.. so here’s the maths!
- Employee is paid an average of £1100 per month
- Under the new JSS Open they will work 20% of their time and be paid normal pay (£220)
- The Employers additional contribution is now 5% of the balance remaining.. ie £1100 – £220 = £880; and then 5% of that (£44)
- The Government will pay up to a 61.67% (!) of the balance remaining ie £1100-£220 = £880; and then 61.67% of that (£542.70)
- The Employee gets:£220 + £44 + £542.70 = £806.70
- of which the Employer pays: £220 + £44 = £264
- and the Government pays £542.70
Staying the same:
- The scheme opens on the 1st November at the end of the current Coronavirus Job Support Scheme (CJRS)
- You can use the scheme even if you did not use the CJRS (i.e. have staff on furlough)
- If you had staff on furlough and they are still with you by the end of January 2021, then you could be eligible for the Furlough Job Retention Bonus of £1k per individual
What we don’t yet know:
- How this would affect consultation on potential redundancies; notice pay and so on but as per previous briefings; this could be considered as a ‘suitable alternative’ to redundancy by an Employment Tribunal – so please contact us if you’re considering downsizing!
- We also don’t know if Employers will be able to ‘Top Up’ (as was allowed under the CJRS/Furlough Scheme).. but our view is ‘not’ .. but of course, we have not yet seen the detail!
The Chancellor also announced the following:
- Additional backdated cash grants of up to £2100 per month for eligible businesses in any tier even if they are not forced to close
- 2 additional (and taxable) SEISS grants for the self employed.. but only if you were eligible for the previous grants
- Additional grants via Local Authorities for Tier 2 (High Alert) affected business; even if that business was not legally required to close; and further grants for those in Tier 3
So what about the “Job Support Scheme Closed”?
There is no change to the Expanded Job Support Scheme (now rebranded as the “Job Support Scheme Closed“) … Details of which were announced last week. A brief reminder..
- It takes effect from the 1st November and will be available for 6 months; with a review in January 2021
- Businesses ‘legally’ required to close before the 1st November have (for the most part) been able to avail of the Coronavirus Job Retention Scheme – ‘Furlough’
- To be eligible, employees must be employed and an Real Time Information (RTI) submission notifying payment in respect of that employee to HMRC must have been made on or before 23 September. The claim service will be available from early December.
- Under the scheme, employees will need to be furloughed for a minimum of seven consecutive days at any given time and the payments to employers will be made monthly in arrears.
- Payments will be 2/3rds of an employees salary up to a maximum of £2,100 per month
- Employers will have to pay National insurance and pension contributions, but will not have to contribute to wages
We will keep you updated
The finer details on how all these schemes are to be operated (i.e. what the HMRC wants us to do!) are yet to be released. We will of course continue to keep you updated as and when so contact us with specific queries and check out our Coronavirus Hub (at the top of our webpage) for the latest information.
