The Job Support Scheme (or JSS as it’s known) will eventually follow on from the Coronavirus Job Retention Scheme (or furlough scheme). This was originally planned for 1st November 2020, but the CJRS has been extended for a further month in light of the government’s lockdown announcement for England.
Like its CJRS predecessor, the JSS aims to keep workers in jobs by providing funding to employers who might otherwise need to make redundancies.
Subsequent updates to the original Job Support Scheme have bought us to the current version, split into two types; ‘open’, and ‘closed’.
Which employees can I claim for?
The original JSS guidance stated that employers can only claim a Job Support Scheme grant for employees who were ‘on the payroll’ between 6th April 2019 and 23rd September 2020. With the Job Support Scheme being postponed to allow for the CJRS extension, it’s not yet certain if this date range will be extended.
It means that you can only receive JSS funding for employees who you made RTI submissions for in that period.
These are the data submissions which you, or your payroll provider, send to HMRC to tell them about an employee’s pay and tax deductions. HMRC will use your RTI submission for PAYE to check your claim, so be warned!
It’s also worth noting for the JSS Closed grant that your employee must stop working for a minimum of 7 consecutive days.
What is the difference between JSS Open and JSS Closed?
The level of support available to employers depends on which version of the scheme they are eligible to use.
Job Support Scheme (JSS) Open – for businesses who can legally remain open, but who are experiencing less demand as a result of coronavirus.
Job Support Scheme (JSS) Closed – for businesses who must close because of legal coronavirus restrictions temporarily coming into force.
How much can employers claim through the Job Support Scheme (Open)?
The short answer is ‘up to a maximum of £1,541.75 per employee, per month’ but there are of course conditions to this.
The employee must work at least 20% of their ‘usual’ hours. Employers will continue to pay staff for the hours that they work.
The government will then provide funding for up to 61.67% of the ‘reference salary’ for the hours not worked, up to a maximum of £1,541.75 per month. This is paid in arrears, so employers must pay their employees, and then claim JSS Open.
Employers will also pay staff for a minimum of 5% of the reference salary for their unworked hours, up to a maximum of £125 per month. Confusingly, though HMRC guidance describes the employer’s contribution as a ‘maximum amount’, employers can choose to top this up further if they wish to do so.
What is meant by reference salary?
HMRC’s guidance about the Job Support Scheme (Open) is specific about basing claims calculations on an employee’s reference salary. Our table explains reference salary for employees with fixed pay, and for those with variable pay.
Understanding reference salaries for fixed pay and variable pay
What is the reference salary for employees with fixed pay?
What is the reference salary for employees with variable pay?
Fixed pay means that the employee’s pay doesn’t change based on how many hours they work. They’re paid a fixed amount each time you run payroll.
Variable pay means that your employee’s hours might vary, and that you pay them for the hours they work.
The reference salary will be the greater of:
The wages paid to your employee in the last pay period which ended on 23rd September 2020 or before.
The wages paid to your employee in the last pay period which ended on or before 19th March 2020.
The reference salary will be the greater of:
The wages that they earned over the same period in the 2019-20 tax year.
The average of the wages paid to them during the 2019-20 tax year
The average of the wages paid to them from 1st February 2020 (or their actual start date if it was after 1st Feb) until 23rd September 2020.
Claims for the JSS Open are subject to a maximum reference salary of £3,125 per each calendar month.
How do I work out my employee’s usual hours for the Job Support Scheme?
The JSS Guidance also refers to your employee’s usual hours. Our table shows what the usual hours are, depending on whether your employee works a fixed number of hours or variable hours.
Working out the usual hours for employees who work fixed or variable hours
What are usual hours for employees who work fixed hours?
What are usual hours for employees who work variable hours?
Fixed hours mean that the employee is contracted to work the same number of hours each pay period.
Working variable hours means that your employee isn’t contracted to work a set number of hours, and you pay them depending on the hours they work.
The usual hours will be the greater of:
The number of hours that your employee was contracted to work for the last full pay period which ended on or before 23rd September 2020.
The number of hours that your employee was contracted to work for the last full pay period which ended on or before 19th March 2020.
The usual hours will be the greater of:
The number of hours that your employee worked over the same period in the 2019-20 tax year.
The average number of hours that your employee worked during the 2019-20 tax year
The average number of hours that they worked from 1st February 2020 (or their actual start date if it was after 1st Feb) until 23rd September 2020.
Who pays what under the JSS Open?
Employees who earn up to the maximum salary of £3,125 or less each month can expect to receive at least 73.33% of their normal pay through the JSS Open. But where does that figure come from?
First off, the employee must work at least 20% of their normal hours, which the employer pays for.
This leaves 80% of the hours unworked.
Of this 80%, the employer will pay for 5% of these unworked hours. This equates to 4% of the total contracted hours (5% of 80 = 4).
This means in total the employer pays for 24% of the total contracted hours.
The government will pay for 61.67% of the unworked hours. This equates to 49.33% of the total contracted hours (61.67% of 80 = 49.33). This is capped at £1,541.75 per month.
This means in total the government pays for 49.33% of the total contracted hours.
So, an employee will receive 73.33% off their normal contracted pay; 24% from their employer plus 49.33% from the government.
This leaves 26.67% of an employee’s normal contracted hours unpaid. Employers can choose to top this up, but don’t have to.
How much can employers claim using JSS Closed?
The Job Support Scheme for closed businesses is slightly different. The government is offering funding for up to two-thirds of an employee’s normal wages, up to a monthly maximum of £2,083.33. As the employer, you can also choose to top up the amount.
Employers can claim the funding once they have paid their employees, and submitted an RTI to tell HMRC.
This route doesn’t include closures as a result of coronavirus outbreaks in specific workplaces, or those businesses closing as a result of financial difficulties.
Instead, it’s aimed at supporting businesses who are required to shut due to COVID restrictions. For instance, restaurants in areas which are placed under local lockdown rules.
Because some employees can’t work from home in these circumstances, JSS Closed doesn’t include a requirement for staff to work a minimum number of hours.
The good news is that businesses with a reduced service will still be eligible to claim. This means that a restaurant forced to close its doors can:
claim the grant for waiting-staff who cannot work
whilst also continuing to employ its other workers to operate delivery or collection services.
Of course, employers will only be able to claim the Job Support Scheme (Closed) grant for those staff who are unable to work.
Can I claim both the JSS Open and the JSS Closed?
Employers can claim both types of the Job Support Scheme if they need to. We’ve shown a couple of examples below.
If you have a business with multiple branches, then you might need to claim JSS Closed for employees in an area locked down, whilst claiming JSS Open for other areas.
You may need to claim JSS Open for a period of time. If your area is placed under more severe coronavirus restrictions, you might then need to start claiming JSS Closed.
So, employees can be moved from one scheme to the other, but be very careful with calculations! You can claim both schemes for the same employee, but make sure that the hours you’re claiming for don’t overlap.
Can I top up my employee’s salary if I claim JSS?
Yes, the government has said that employers can top-up staff salaries if they claim for either JSS Open or JSS Closed.
This is at the employer’s own discretion, and there is no obligation to do so. Employers using JSS Open are required to contribute a minimum of 5% towards unworked hours though.
Does JSS include National Insurance or pension payments?
The Job Support Scheme grant doesn’t include the cost of National Insurance contributions (NICs) and pension contributions.
As an employer you will still need to continue making these for eligible employees, but won’t be able to claim grant funding for it.
Can directors use the Job Support Scheme?
At the moment directors don’t get a mention in the Job Support Scheme fact sheet, so it’s not certain if directors will be eligible or not. This will hopefully be something that gets an answer when further guidance is released.
Can I claim the Job Support Scheme grant for employees who weren’t furloughed?
Yes, you can apply to use the scheme, even if you’re claiming for staff that you didn’t furlough.
It’s also worth noting that the grant is worked out based on the employee’s usual wages. So, if employees have previously been furloughed, the claim is worked out using their normal pay, not what they received whilst on furlough.
Can I still claim the Job Retention Bonus if I use the Job Support Scheme?
Yes, employers can claim the Job Retention Bonus if they are eligible, as well as using either type of the Job Support Scheme grant.
Can any employer use the Job Support Scheme?
The JSS is primarily to support small and medium-sized enterprises (SMEs) which employ staff.
For the purposes of Job Support Scheme eligibility, HMRC are describing an SME as an employer with fewer than 250 employees as at 23rd September 2020.
Larger businesses, that employ 250 people or more, can still apply as long as they’re able to satisfy the conditions of a Financial Impact Test. UK registered charities are exempt from that requirement.
The HMRC guidance so far only details a Financial Impact Test for VAT registered businesses. It involves a comparison of the VAT returns submitted; only those whose figures have remained the same or reduced can apply for the JSS grant.
Large employers who aren’t VAT registered have been promised that further guidance will be available for them by the end of October.