Changes to the Jobs Support Scheme…before it even launches!
The Jobs Retention Scheme (JRS) in its current form ends on 31st Oct 2020, and all claims made under this scheme need to be made by 30th November 2020.
It’s successor, the Jobs Support Scheme (JSS), will open on 1 November 2020 and is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19 to help keep their employees attached to the workforce.
When originally announced, the JSS saw employers paying a third of their employees’ wages for hours not worked, and required employees to be working 33% of their normal hours in order to qualify. However, this week Rishi Sunak announced a major overhaul of the scheme before it even goes live, splitting the original scheme into two distinct elements depending on whether the area in which you operate is locked down or not.
The “Jobs Support Scheme – Open” (JSS-O) is designed to protect jobs in businesses who can operate safely but are facing lower demand over the winter months due to Covid-19. The scheme enables these businesses to retain employees on shorter hours, preserving valuable employment matches and protecting incomes. The announcement reduces the employer contribution towards unworked hours to just 5% (from the aforementioned 33%) and reduces the minimum hours requirements to 20% (from 33%) so those employees working just one day a week will now be eligible. The Government will pay 61.67% of hours not worked up to a cap of £1,541.75 per month, with the employer contributing 5% of non-worked hours up to a cap of £125 per month.
Meanwhile, those businesses that are legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK will be able to access the support they need through “Jobs Support Scheme – Closed” (JSS-C) Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month (although their employer has discretion to pay more than this if they wish). The intention is to protect employee incomes and limit unemployment so that these premises are able to reopen as quickly as possible when circumstances allow.
Employers using the Job Support Scheme will still be able to claim the Job Retention Bonus (JRB), a £1,000 one-off taxable payment to the employer for each eligible employee furloughed and kept continuously employed until 31 January 2021. The Job Retention Bonus can be claimed from 15th Feb 2021, and taking JSS-Open and JRB together, an employer could receive over 95% of the total wage costs of their employees if they are retained until February 2021.