On 22nd October 2020 the Job Support Scheme was extended to provide more government support to businesses.
Below are the frequently asked questions on the updated job support scheme.
UPDATE: on 31st October 2020 the Government announced a second lockdown for England. As a result the Furlough Scheme also known as the Job Retention Scheme will continue throughout November to March 2021. The Job Support Scheme will now not commence until further notice.
See our blog Furlough Scheme November to March for more information.
Any employer that is facing decreased demand can qualify. It applies to all areas including those in all Covid alert tiers.
Businesses which can still open, but are nonetheless still struggling, qualify for the job support scheme known as JSS open.
Those businesses which are required to shut due to restrictions, qualify for the job support scheme known as JSS closed.
JSS open is the job support scheme available to businesses which can stay open.
Under JSS open the employee needs to work a minimum of 20% of their usual hours.
The remaining hours which are unworked are then apportioned, so that 5% is paid by the employer, 61.67% is paid by the Government and 33.33% is lost by the employee.
The employer must pay for the hours actually worked in the normal manner. This must be a minimum of 20% of the usual hours worked by the employee.
The employer then pays an extra 5% relating to the hours not worked up to a maximum of £125 per month.
Employers National Insurance and Employers Pension payments must be paid by the employer.
The Government will pay an extra 61.67% relating to the hours not worked up to a maximum of £1,541.75 per month.
Under JSS open, employees who earn under £3,125 will receive a minimum of 73% of their usual wage.
An employee normally has 100 usual hours but agrees to work only 20 hours. As a result, the hours not worked is 80 hours.
Hours actually worked must be paid in the normal way = 20 hours
Unpaid hours is 80 multiplied by extra employer contribution of 5% = 4 hours
Therefore the employer must pay for 24 hours
Unpaid hours is 80 multiplied by government contribution of 61.67% = 49.3 hours
Government must pay for 49.3 hours
Employee lost contribution:
Unpaid hours is 80 multiplied by 33.33% = 26.7 hours
Employee loses out on nearly 27 hours of usual hours paid but the employee still receives a minimum of 73% which in this example is 73 hours.
JSS closed is the job support scheme available to businesses which must be closed due to Government restrictions.
Under JSS closed the employee will receive two thirds of their normal salary which is paid in full by the Government.
The monthly amount is restricted to £2,083.33 per employee.
Under JSS closed the employer is still required to pay both Employers NI and Employers Pension contributions.
To qualify for the job support schemes, the employee must have been on the payroll on or before the 23rd September 2020.
All types of employees qualify including those on zero hours and temporary contracts.
This scheme is different to the Job Retention Scheme. As a result there is no requirement that the employee was previously furloughed.
The job support scheme has been postponed until further notice.
Employers remain responsible for paying the employees. This includes both the employer and Government contributions.
The amounts relating to the Government contributions are then reclaimed and paid to the employer.
The originally claims could be made from 8th December 2020. This was expected to cover pay periods ending the month of November.
Further claims are expected to follow the same pattern with final claims made in early May 2021 covering the April 2021 pay period.
However, now that the scheme has been postponed, no detail of when claims can be made has been announced.
Yes, accountants who are registered as agents and authorised to do payroll online can submit claims for their clients.
Employers and employees must agree to the temporary changes to their working agreement.
The agreement must cover a minimum of 7 days.
HMRC are due to publish further advice on written agreements later this month (October 2020). Please note that all contract changes are subject to employment law therefore legal advice may be required.
Employers are required to pay for normal hours worked plus 5% of the remaining hours not worked.
They can however, top up this minimum level of contribution if they choose to.
No official guidance has yet been provided.
Most Directors pay themselves an optimum tax efficient amount and therefore don’t tend to have a formal written contract. As a result, it is difficult to predict whether the lack of a contractual payment will mean Directors potentially don’t qualify.
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