Changes to Coronavirus Job Support Scheme

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Jayne Turner | 29th October 2020

Changes to Coronavirus Job Support Scheme

The UK government announced recently that it will significantly increase the generosity and reach of its winter support schemes to ensure livelihoods and jobs across the UK continue to be protected in the difficult months to come, supporting jobs and helping to contain the Covid virus. Below we have summarised the main points and provided a worked example.

  • The Job Support Scheme (JSS) will open on 1‌‌‌ ‌November and run for six months, until 30‌‌‌ ‌April 2021. The government has said it will review the terms of the scheme in January 2021. There are now two variations to JSS – JSS Open and JSS Closed.
  • JSS Open will provide support to businesses that are open where employees are working shorter hours due to reduced demand. Your employees will need to work at least 20% of their usual hours. You will continue to pay employees for the hours they work, and the UK government will pay a contribution of 61.67% of the usual pay for hours not worked, up to a maximum of £1,541.75 per month. You will pay 5% of the usual pay for hours not worked, up to a maximum of £125 per month, and can top this up further if you choose. This means employees should receive at least two thirds of their usual pay for hours not worked.
  • The caps are reduced according to the proportion of hours not worked. Further guidance on this will be available on GOV‌‌‌‌.UK shortly.
  • You will need to cover all employer National Insurance and pension contributions.
  • JSS Closed will provide support to businesses whose premises are legally required to close as a direct result of coronavirus restrictions set by one of the four governments of the UK. This includes premises restricted to delivery or collection-only services from their premises, and those restricted to providing food and/or drinks outdoors.
  • For JSS Closed, the UK government will fund two thirds of employees' usual wages for time not worked, up to a maximum of £2,083.33 per month. You will not be required to contribute, but you can top up the government’s contribution if you choose to. You will still need to cover all employer National Insurance and pension contributions.
  • You’ll be able to make your first JSS claim in arrears from 8 ‌‌‌‌December, for pay periods ending and paid in November.
Example
 
Following on from the Government’s announcement of the Job Support Scheme (JSS) we have put together an example calculation to show what it will cost you as an employer to use the scheme for your employees.
 
For an employee whose usual hours are 40 hours per week and is paid at a rate of £8.72 per hour (£348.80 per week).
 
The employee must return to work, working a minimum of 20% of their usual hours
Based on an employee returning to work 8 hours per week.
 
8 hours X £8.72 = £69.76 pay for hours worked
£348.80 less £69.76 = £279.04
 
Employer will then pay 5% of that balance which is left £279.04 x 5% = £13.95
The government will also pay 61.67% of the balance which is left £279.04 x 61.67% = £172.08
 
Therefore the employee will receive a gross total of £255.79 for their 8 hours worked
The total cost to the employer is £83.71 for those 8 hours worked plus £11.98 National Insurance and £4.07 pension if applicable, therefore total £99.76.
 
The Government’s contribution is capped at £1,541.75 per month (£355.79 per week).
 
A claim will be submitted on a monthly basis in arrears as with the current furlough scheme.
 
 

To see all our updates on Coronavirus click here

To go to the government website on business support click here