Understand the details behind the new Job Support Scheme and what it means for your business.
The Chancellor has announced the expansion of the Job Support Scheme (JSS) on 9 October to support businesses, on more generous terms, which are legally required to close because of local restrictions or have previously been unable to open. Under the expanded scheme the government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month. The scheme will open on 1 November and will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via a HMRC claims service that will be available from early December. More information on the expanded JSS can be found here.
On 24 September, the Chancellor announced the Job Support Scheme (JSS) – a successor to the Job Retention Scheme (JRS) that has supported the jobs and livelihoods of almost 9.6 million people across the UK since March. With firms under significant cash-flow pressures, needing to make important decisions about how to keep their businesses afloat and whether or not to make the hard choice to start redundancy consultations, the JSS will come as a welcome relief. The CBI has campaigned for this much-needed successor to the JRS as demand has been flat, hindering some business’ ability to viably reopen.
Read this factsheet to get our latest understanding of the details on the design of the JSS, and what it may mean for your business.
What’s the latest information and insight?
The JSS is likely to halt many business’ redundancy decisions, but it will be less generous than the JRS and the Chancellor has made it very clear that it will not be possible to save every job. A challenge of the new JSS is that it does not provide any financial support for businesses where people are unable to work when following government instructions – e.g. when self-isolating, or when companies have been instructed not to reopen or need to close due to local lockdowns; this is something the CBI will continue to advocate for.
Eligibility: The scheme will run for six months starting from 1 November 2020. It will be open to all employers – not only the ones that have received support under the JRS. All SMEs will be eligible, but large businesses will be required to demonstrate that their business has been adversely affected by COVID-19.
Entitlement: Under the new Job Support Scheme, the company will pay employees for the hours worked. The cost of the hours not worked will be split between the employer, the government, and the employee. This means that employees will earn a minimum of 77% of their normal wage where the government contribution has not been capped. Employees will need to work a minimum of 33% of their usual hours and must not be on redundancy notice.
Calculations on government and business contributions:
|
Actual worked hours |
Government contribution |
Employer additional |
Employer total contribution |
Employee receives |
|
33% |
22% |
22% |
55% |
77% |
|
40% |
20% |
20% |
60% |
80% |
|
50% |
16.67% |
16.67% |
66.67% |
83.34% |
|
60% |
13.33% |
13.33% |
73.33% |
86.67% |
|
70% |
10% |
10% |
80% |
90% |
|
80% |
6.67% |
6.67% |
86.67% |
93.34% |
|
90% |
3.33% |
3.33% |
93.33% |
96.66% |
JSS: what we know so far
What are the eligibility criteria for the JSS?
- The scheme will be open to any UK employer affected by COVID-19, not only the ones who have used JRS before. It is:
- Open to all SMEs, without condition
- Open to larger businesses that meet a financial assessment test which shows that their turnover has been adversely affected by COVID-19.
- Employees claimed for must be on an employer’s PAYE payroll on or before 23 September 2020
- Between November and January, employees must work at least one third of their ‘usual working hours’ for a minimum 7-day period; the government will consider whether to increase the minimum hours threshold thereafter
- Employees cannot be on notice of redundancy during the period their employer claims via JSS.
What support will companies be entitled to under the JSS?
- For every hour not worked, the employer and the government will each pay one third of the employee’s usual pay; the government contribution will be capped at £697.92 per month
- The grant will not cover employer NICs or pension contributions
- Employers that retain staff, even on short-time hours via the JSS, can claim the Job Retention Bonus which is a one-off payment to employers of £1,000 for every employee claimed for under the JRS who is continuously employed between 1 November and 31 January 2021. Employees must earn at least £520 p/m, on average, during this period.
How long will the JSS be in place for and when will the scheme open?
- The scheme will be open from 1 November 2020 and will run for 6 months - to the end of April 2021
- Employers will be able to claim from December 2020.
When will the government publish more details on the scheme?
- We expect the government to publish further details on the design of the JSS later this month, the process will likely be iterative
- We will publish any further updates on our website.
What next?
The CBI has welcomed the announcement of the JSS as we believe that this scheme can make a substantial difference for many companies. Firms support the scheme’s aims and principles, but there are many outstanding questions about its implementation. We expect the government to publish further details of the design of the JSS later in October, with the issuing and updating of guidance likely to be iterative. Therefore, we are keen to hear from members about their most pressing questions that would help them to decide if the JSS could work for them. We will use this information to help guide our conversations with government and to support the development of the forthcoming guidance to make it as practical as possible. The most pressing questions we have identified so far are:
- When is more detail expected to be published to help businesses plan?
- How will the government define SMEs and ‘large businesses’?
- How will larger firms be required to prove that their turnover has been adversely affected by COVID-19?
- Do employees need to work their normal duties, or can they perform any work?
- How will usual hours be defined under the JSS, especially in the case of staff with variable hours?
Please send your feedback on the JSS and your most pressing questions to the Coronavirus inbox
Further resources
- Winter Economy Plan – will help your business understand all economic support measures that the Chancellor announced on 24 September
- CBI’s webinar – provides an analysis of the measures announced in the Winter Economy Plan
- HMT factsheet – that gives a brief overview of the key facts on the JSS.
