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Job Support Scheme – What will change after furlough?

The Job Support Scheme is designed to protect viable jobs in businesses that are facing lower demand due to restrictions imposed by Covid-19.

The current Coronavirus Job Retention Scheme (CJRS), providing government support for furloughed employees, is due to end on 31 October. It will be replaced by the Job Support Scheme (JSS), which will run for six months from 1 November until April 2021.

The hospitality sector has been hit particularly hard by Covid-19 and the JSS is a step towards supporting the industry to retain employees over the coming months.

The scheme provided different types of support including assistance for businesses that are forced to close as a direct result of government-imposed coronavirus restrictions.

How will the Job Support Scheme work?

Under the new scheme, an employee must work for at least 20% of their contracted hours (one day per week). Their employer will contribute 5% over and above those hours. The Government will then pay up to 61.7% of wages for hours not worked, up to a maximum of £1,541.75.

The new scheme will not cover NICs or pension contributions as these will remain payable by the employer.

What does it mean to be on ‘reduced hours’?

To qualify for support under the scheme employees must be working for at least 20% of their usual hours and must be paid their normal contracted wage for those hours.

During this time employees cannot be made redundant or put on notice of redundancy if their employer is claiming support through the JSS for that employee.

How long will the Job Support Scheme be in operation?

The scheme will open on 1 November 2020 until the end of April 2021. Employers will be able to make a claim online through Gov.uk from December 2020. Claims will be paid on a monthly basis.

Grants will be payable in arrears, meaning that a claim can only be submitted for a given pay period, after payment to the employee has been made and the payment has been reported to HMRC via an RTI return.

Eligibility for Job Retention Bonus

Employers using the scheme will also be able to claim the Job Retention Bonus (JRB) for each employee that meets the eligibility criteria of the JRB. This is worth £1,000 per employee. 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.

Who is eligible to receive payments under the Job Support Scheme?

Employers

All employers with a UK, Channel Islands or Isle of Man bank account and are enrolled for PAYE online can claim the grant. Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.

Some restrictions may apply and employers should consult the UK Government website for more information.

Employees

Employees must be on an employer’s PAYE payroll between 6 April 2019 and 11.59pm on 23 September 2020 and must work at least 20% of their usual hours for the first three months of the scheme.

Employers can only claim for employees that were in their employment on 23 September 2020. If an employee ceased employment on 23 September 2020 and was subsequently rehired, then employers can claim for them.

Employees do not need to have been furloughed under CJRS to be eligible for JSS.

Employees will be able to cycle on and off the scheme and do not have to be working the same shift patterns each month. Each short time working arrangement must cover a minimum of seven days.

Who can claim JSS Open?

In addition to the general Job Support Scheme eligibility criteria set out above, employers are eligible to claim the JSS Open if:

  • an employer with 250 or more employees on 23 September 2020 has undertaken a Financial Impact Test, demonstrating their turnover has remained equal or fallen to show they have been adversely affected due to coronavirus; an employer with less than 250 employees on 23 September 2020 is not required to satisfy the test.
  • some, or all, of their employees are working reduced hours – employees must still be working for at least 20% of their usual hours

Other support for hospitality businesses

In addition to the JSS change, the Chancellor also announced changes to the grants available for businesses in tier 2 by:

  • Increasing the profits covered by the two forthcoming self-employment grants from 20% to 40%, meaning the maximum grant will increase from £1,875 to £3,750. The grants will be paid in two instalments, each covering three months starting from November.
  • Providing cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert (i.e. tier 2) level areas.

    These grants will be available retrospectively for businesses in areas that have already been subject to restrictions and are available to businesses who aren’t legally required to close but have been adversely affected by local restrictions nonetheless.

    In addition, local authorities will be given an additional 5% on top of this grant to distribute to local businesses that are indirectly affected by the tier system, this includes supplier businesses.

Tier 3 grants effectively remain unchanged.

A JSS Open fact sheet can be found here and UKHospitality has produced a briefing document on the new business support package, which can be found here

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