On Thursday 24th September 2020, Rishi Sunik announced the new Job Support Scheme (JSS) that would take over from the Furlough Scheme on 1st November 2020. Inevitably, this has led to questions about how this now affects businesses going forward and more importantly, what exactly IS this new scheme?
Furlough or ‘Coronavirus Job Retention Scheme (CRJS)’ was brought in to help businesses and employees in March 2020. This scheme allowed employers to furlough employees and the government would pay 80% of their wages up to a maximum of £2500 a month. The scheme was a big hit and saved what would have been a huge wave of redundancies back in March, however all good things must come to an end…
What is the Job Support Scheme?
The Job Support Scheme is nowhere near as generous as the furlough scheme; however, it is still there to help (something is better than nothing!) Whilst the furlough scheme’s focus was to keep people in jobs, the Job Support Scheme has had a shift in focus and is aimed at retaining viable jobs. Let’s break it down to numbers.
The employee will earn at least 77% of their normal wages, this is split into the employee working at least 33% of their hours, the government contributing a third of hours not worked and the employer contributing a third of hours not worked.
Natalie works 40 hours a week on £10 per hour. Her normal weekly wage is £400 per week.
Using the Job Support Scheme, Natalie must work a minimum of 33% = 13.2 hours.
Natalie is paid normally for those hours earning her £132.
This will mean Natalie is £268 short of her normal wages.
The £268 is then split into a third paid by the employer and a third paid by the government (£89.33 each)
This will mean Natalie will earn £310.66 out of her normal £400 wage (78%).
N.B The government contribution is capped to a maximum of £697.92 a month.
Who is eligible?
Employees must have been on the PAYE payroll on or before 23rd September 2020. The employee must work 33% of their normal working hours for the first 3 months. This is being reviewed by the Government with the potential to increase the minimum hours threshold after 3 months.
Employees will be able to come on and off the scheme, however each short time working arrangement must cover a period of 7 days minimum.
Employers do not need to have placed employees onto the furlough scheme to be eligible to the Job Support Scheme.
Other useful information
- Employers will still be responsible for paying Class 1 National Insurance contributions and pension contributions.
- Employers cannot ‘top up’ wages for hours not worked at their own expense.
- Claims can be made online through gov.uk between November and December and will be paid monthly in arrears.
- Employers are not able to make employees redundant whilst they are on the Job Support Scheme.
If you require any additional support with the new Job Support Scheme, please feel free to contact us at email@example.com or by calling 01527 571617.