This article was updated on 27 October to take account of the changes to the scheme announced on 22 October.
The job support scheme (JSS) was announced as part of the winter economic plan on 24 September, as a successor to the coronavirus job retention scheme (CJRS). It was subsequently expanded on 9 October to address the consequences of businesses being forced to close under lockdown restrictions and again on 22 October to help with the consequences for business affected by local and national restrictions but not forced to close. There are now two variants of the JSS: JSS Open and JSS Closed.
This summary has been updated for the announcements on 22 October and the guidance published on the expanded JSS Open and how to claim relief. More guidance is still due.
What does the JSS cover?
The JSS will support two very different situations:
What is not covered by the JSS Closed?
The expansion to cover businesses forced to close premises will not help a number of businesses, which must instead rely on the JSS Open, where available, including:
So what does an employee receive?
What is ‘usual salary’?
An employee's usual salary will be based on their pre-JSS pay (or even pre-CJRS pay). Whilst not yet explicitly stated, it is likely that usual salary will be determined using the same methodology as under the CJRS. This means that care will be needed when calculating the grant for employees with variable pay and particular consideration will need to be given to issues such as tips, commissions, non-cash payments and salary sacrifice arrangements.
What are ‘usual hours’?
An employee's usual hours will be based on their pre-JSS working hours (or possibly pre-CJRS working hours). As with usual salary, whilst not yet explicitly stated, it is likely that usual hours will be determined using the same methodology as under the CJRS.
And what does an employer have to pay?
In the example above of an employee working the minimum 20% of their usual hours, under the standard JSS, the employer will pay the 73.3% to the employee and will claim a grant from the government equivalent to 49.3%. Employers will need to pay employer NICs and auto-enrolment pension contributions on the full amount paid to the employee. At least national minimum/living wage (NMW) rates must be paid for all hours worked or treated as worked. Employers will be able to top up employee pay for unworked hours.
Under the JSS Closed, employers will pay the 67% of normal wages to the employee and claim it back from the government, up to a maximum of £2,083.33 per month. Again, employers will be required to cover employer NICs and auto-enrolment pension in full. Employers can top up employee pay if they wish, but are not obliged to.
Which employees are covered?
For both limbs of the JSS, any employee as at 23 September, who is registered on the PAYE payroll on or before 23 September 2020, is eligible. This means a real time information (RTI) submission notifying payment to that employee to HMRC must have been made on or before this date. If employees ceased employment after 23 of September 2020 and were subsequently rehired, then employers can claim for them. It is expected that guidance will address any exceptions to this as with the CJRS, e.g. employees transferred under TUPE.
Employers must decide which employees to include (for the JSS Open), agree the new scheme with the relevant staff, make any changes to the employment contract by agreement, and notify the employee in writing. Employers should ensure all documented decisions, processes and/or communications are retained and stored in an accessible location should HMRC wish to review these in the future. Employees may request to be put on the JSS but ultimately it is the employer’s decision and they should take care to ensure all relevant conditions are met before making a JSS claim. As with the CJRS, employers should seek employment law advice where appropriate.
For the JSS Open, employees must be working reduced hours for a minimum of seven consecutive days and can cycle on or off the scheme subject to a seven-day minimum for each period of being included in the JSS. For the JSS Closed, employees must be instructed to and cease work for a similar minimum of seven consecutive days. Practically, this will require clear records to be kept, especially where an employee is said not to be working (a requirement which recalls the rules under the first version of the CJRS). An employee can return to work at a date later than the end of the period for which the JSS is claimed. Employees cannot be made redundant or put on notice of redundancy during the period for which a grant is claimed for them.
For the JSS Open, employees must work (and be paid by for) 20% of their usual hours for the first three months of the scheme (after which the government will consider if the minimum threshold should be increased). Guidance is awaited to understand in what, if any circumstances unworked time will count as time worked for the purposes of the minimum working time (e.g. where an employee is ill, shielding, required to quarantine, on annual leave, etc). It is also hoped that the guidance will clarify whether a claim can be made for individuals on longer-term leave such as sick leave, statutory parental leave, etc.
The government has confirmed that employees will be able to undertake training voluntarily in non-working hours. Where time spent on training attracts a NMW entitlement in excess of the grant payment, employers will need to pay the additional wages. Hours that employees spend training that are paid for by the employer at their full rate of pay will count towards 20% of their usual hours.
An employer can claim the JSS Open and JSS Closed grant at the same time for different employees. An employer cannot claim for a single employee under both schemes for the same day.
Which employers are covered?
All employers with a UK bank account and a UK PAYE scheme registered on or before 23 September 2020 can claim under the JSS. However, while all small and medium-sized businesses are eligible to apply, large businesses will also be required to demonstrate that their business has been adversely affected by covid-19 when claiming the JSS Open. Large businesses (legal entities with 250 or more employees across their payrolls on 23 September 2020) will need to complete a financial impact test. If the employer’s turnover has remained equal or has decreased compared to the previous year, then they will qualify. This test only needs to be taken once before the employer’s first claim for the JSS.
No financial impact test is required to access the JSS Closed. Any charity with 250 or more employees that is registered with a UK charity regulator or are exempt from such registration will not be required to carry out the test and are eligible for this scheme.
The government’s policy paper published on 22 October covers large employers who are VAT registered – considering those who submit quarterly VAT returns, those who submit monthly VAT returns and those who file less frequently. In considering the guidance, large employers who are part of a VAT group should use the turnover figures for the VAT group for this calculation. Guidance for large employers who are not VAT registered will be available by the end of October.
The government expects that large employers will not be making capital distributions, such as dividends, while using either JSS scheme. It has now said that it does not plan to make this expectation a contractual or legal condition of the scheme but instead has encouraged 'business to reflect on their responsibilities'.
If appropriate, businesses claiming under the JSS Closed in respect of premises that have been forced to close can then claim under the JSS Open for employees working shorter hours once the premises re-open.
There is no requirement for businesses to have previously used the CJRS scheme.
When does the JSS come into force?
The JSS will start on 1 November 2020. Employers will be able to make their first JSS claim in arrears from 8 December, for pay periods ending and paid in November. More information about how to make a claim will be available by the end of October.
What happens until then?
Before 1 November, employers can still claim for employees who are furloughed and eligible for the CJRS. However, this provides a lower level of government support for employees not working than was promised under the JSS. In October, the CJRS pays 60% of wages for hours not worked up to a maximum cap of £1,875.
Furthermore, subject to some exceptions, the CJRS will only cover employees on the PAYE payroll and notified to HMRC on an RTI submission on or before 19 March 2020 and who were furloughed for at least three full weeks prior to 1 July 2020. These requirements could exclude a number of employees for whom claims could be made under the JSS.
How long will the JSS last?
The JSS will run from 1 November 2020 for six months (i.e. to 30 April 2020), however, the scheme will be reviewed during that time (including a review of the minimum proportion of working hours). The Government has also said it will review in January the level of support for businesses forced to close.
How does the JSS interact with the job retention bonus (JRB)?
The JRB is a £1,000 one-off taxable payment to employers for each eligible employee that they furloughed under the CJRS and then kept continuously employed until 31 January 2021. Employers will still be able to claim even if they are receiving support under the JSS and indeed JSS grants can be used by employers to pay an employee's wages and help meet the JRB Minimum Income Threshold. The bonus will be available from 15 February until 31 March 2021 and details on how to access the online claim service will be made available by the end of January 2021.
What precautions are the government taking with this scheme?
As with previous government support, HMRC will continue to check claims. However, an innovation announced with the expansion of the JSS is the publication of a list of employers using the scheme. Employees will be able to find out if the employer has claimed for them under the JSS scheme through their online personal tax account and there will be a hotline for employees to notify HMRC if they believe that their employer is claiming fraudulently.
What about any other government support measures?
On 9 September, the government announced that businesses in England that are required to close due to local lockdowns or targeted restrictions due to covid-19, would be able to receive grants under the local restrictions support grant linked to rateable values worth up to £1,500 every three weeks. On 9 October, alongside the extension of the JSS, the government announced an increase in these cash grants. The grants will now be worth up to £3,000 per month payable every two weeks. It also seems that areas going into tier 3 (such as Liverpool and Lancashire at time of writing) have been offered additional support for business from government, though it is not yet clear how that will be delivered.
This article was updated on 27 October to take account of the changes to the scheme announced on 22 October.
The job support scheme (JSS) was announced as part of the winter economic plan on 24 September, as a successor to the coronavirus job retention scheme (CJRS). It was subsequently expanded on 9 October to address the consequences of businesses being forced to close under lockdown restrictions and again on 22 October to help with the consequences for business affected by local and national restrictions but not forced to close. There are now two variants of the JSS: JSS Open and JSS Closed.
This summary has been updated for the announcements on 22 October and the guidance published on the expanded JSS Open and how to claim relief. More guidance is still due.
What does the JSS cover?
The JSS will support two very different situations:
What is not covered by the JSS Closed?
The expansion to cover businesses forced to close premises will not help a number of businesses, which must instead rely on the JSS Open, where available, including:
So what does an employee receive?
What is ‘usual salary’?
An employee's usual salary will be based on their pre-JSS pay (or even pre-CJRS pay). Whilst not yet explicitly stated, it is likely that usual salary will be determined using the same methodology as under the CJRS. This means that care will be needed when calculating the grant for employees with variable pay and particular consideration will need to be given to issues such as tips, commissions, non-cash payments and salary sacrifice arrangements.
What are ‘usual hours’?
An employee's usual hours will be based on their pre-JSS working hours (or possibly pre-CJRS working hours). As with usual salary, whilst not yet explicitly stated, it is likely that usual hours will be determined using the same methodology as under the CJRS.
And what does an employer have to pay?
In the example above of an employee working the minimum 20% of their usual hours, under the standard JSS, the employer will pay the 73.3% to the employee and will claim a grant from the government equivalent to 49.3%. Employers will need to pay employer NICs and auto-enrolment pension contributions on the full amount paid to the employee. At least national minimum/living wage (NMW) rates must be paid for all hours worked or treated as worked. Employers will be able to top up employee pay for unworked hours.
Under the JSS Closed, employers will pay the 67% of normal wages to the employee and claim it back from the government, up to a maximum of £2,083.33 per month. Again, employers will be required to cover employer NICs and auto-enrolment pension in full. Employers can top up employee pay if they wish, but are not obliged to.
Which employees are covered?
For both limbs of the JSS, any employee as at 23 September, who is registered on the PAYE payroll on or before 23 September 2020, is eligible. This means a real time information (RTI) submission notifying payment to that employee to HMRC must have been made on or before this date. If employees ceased employment after 23 of September 2020 and were subsequently rehired, then employers can claim for them. It is expected that guidance will address any exceptions to this as with the CJRS, e.g. employees transferred under TUPE.
Employers must decide which employees to include (for the JSS Open), agree the new scheme with the relevant staff, make any changes to the employment contract by agreement, and notify the employee in writing. Employers should ensure all documented decisions, processes and/or communications are retained and stored in an accessible location should HMRC wish to review these in the future. Employees may request to be put on the JSS but ultimately it is the employer’s decision and they should take care to ensure all relevant conditions are met before making a JSS claim. As with the CJRS, employers should seek employment law advice where appropriate.
For the JSS Open, employees must be working reduced hours for a minimum of seven consecutive days and can cycle on or off the scheme subject to a seven-day minimum for each period of being included in the JSS. For the JSS Closed, employees must be instructed to and cease work for a similar minimum of seven consecutive days. Practically, this will require clear records to be kept, especially where an employee is said not to be working (a requirement which recalls the rules under the first version of the CJRS). An employee can return to work at a date later than the end of the period for which the JSS is claimed. Employees cannot be made redundant or put on notice of redundancy during the period for which a grant is claimed for them.
For the JSS Open, employees must work (and be paid by for) 20% of their usual hours for the first three months of the scheme (after which the government will consider if the minimum threshold should be increased). Guidance is awaited to understand in what, if any circumstances unworked time will count as time worked for the purposes of the minimum working time (e.g. where an employee is ill, shielding, required to quarantine, on annual leave, etc). It is also hoped that the guidance will clarify whether a claim can be made for individuals on longer-term leave such as sick leave, statutory parental leave, etc.
The government has confirmed that employees will be able to undertake training voluntarily in non-working hours. Where time spent on training attracts a NMW entitlement in excess of the grant payment, employers will need to pay the additional wages. Hours that employees spend training that are paid for by the employer at their full rate of pay will count towards 20% of their usual hours.
An employer can claim the JSS Open and JSS Closed grant at the same time for different employees. An employer cannot claim for a single employee under both schemes for the same day.
Which employers are covered?
All employers with a UK bank account and a UK PAYE scheme registered on or before 23 September 2020 can claim under the JSS. However, while all small and medium-sized businesses are eligible to apply, large businesses will also be required to demonstrate that their business has been adversely affected by covid-19 when claiming the JSS Open. Large businesses (legal entities with 250 or more employees across their payrolls on 23 September 2020) will need to complete a financial impact test. If the employer’s turnover has remained equal or has decreased compared to the previous year, then they will qualify. This test only needs to be taken once before the employer’s first claim for the JSS.
No financial impact test is required to access the JSS Closed. Any charity with 250 or more employees that is registered with a UK charity regulator or are exempt from such registration will not be required to carry out the test and are eligible for this scheme.
The government’s policy paper published on 22 October covers large employers who are VAT registered – considering those who submit quarterly VAT returns, those who submit monthly VAT returns and those who file less frequently. In considering the guidance, large employers who are part of a VAT group should use the turnover figures for the VAT group for this calculation. Guidance for large employers who are not VAT registered will be available by the end of October.
The government expects that large employers will not be making capital distributions, such as dividends, while using either JSS scheme. It has now said that it does not plan to make this expectation a contractual or legal condition of the scheme but instead has encouraged 'business to reflect on their responsibilities'.
If appropriate, businesses claiming under the JSS Closed in respect of premises that have been forced to close can then claim under the JSS Open for employees working shorter hours once the premises re-open.
There is no requirement for businesses to have previously used the CJRS scheme.
When does the JSS come into force?
The JSS will start on 1 November 2020. Employers will be able to make their first JSS claim in arrears from 8 December, for pay periods ending and paid in November. More information about how to make a claim will be available by the end of October.
What happens until then?
Before 1 November, employers can still claim for employees who are furloughed and eligible for the CJRS. However, this provides a lower level of government support for employees not working than was promised under the JSS. In October, the CJRS pays 60% of wages for hours not worked up to a maximum cap of £1,875.
Furthermore, subject to some exceptions, the CJRS will only cover employees on the PAYE payroll and notified to HMRC on an RTI submission on or before 19 March 2020 and who were furloughed for at least three full weeks prior to 1 July 2020. These requirements could exclude a number of employees for whom claims could be made under the JSS.
How long will the JSS last?
The JSS will run from 1 November 2020 for six months (i.e. to 30 April 2020), however, the scheme will be reviewed during that time (including a review of the minimum proportion of working hours). The Government has also said it will review in January the level of support for businesses forced to close.
How does the JSS interact with the job retention bonus (JRB)?
The JRB is a £1,000 one-off taxable payment to employers for each eligible employee that they furloughed under the CJRS and then kept continuously employed until 31 January 2021. Employers will still be able to claim even if they are receiving support under the JSS and indeed JSS grants can be used by employers to pay an employee's wages and help meet the JRB Minimum Income Threshold. The bonus will be available from 15 February until 31 March 2021 and details on how to access the online claim service will be made available by the end of January 2021.
What precautions are the government taking with this scheme?
As with previous government support, HMRC will continue to check claims. However, an innovation announced with the expansion of the JSS is the publication of a list of employers using the scheme. Employees will be able to find out if the employer has claimed for them under the JSS scheme through their online personal tax account and there will be a hotline for employees to notify HMRC if they believe that their employer is claiming fraudulently.
What about any other government support measures?
On 9 September, the government announced that businesses in England that are required to close due to local lockdowns or targeted restrictions due to covid-19, would be able to receive grants under the local restrictions support grant linked to rateable values worth up to £1,500 every three weeks. On 9 October, alongside the extension of the JSS, the government announced an increase in these cash grants. The grants will now be worth up to £3,000 per month payable every two weeks. It also seems that areas going into tier 3 (such as Liverpool and Lancashire at time of writing) have been offered additional support for business from government, though it is not yet clear how that will be delivered.
