UK Chancellor of the Exchequer Announces Increased Government Contribution for Job Support Scheme
On 22 October 2020, UK Chancellor of the Exchequer Rishi Sunak MP announced several important changes to the Job Support Scheme (JSS), including that the government will more than double its contribution for the JSS for certain workers to make up for lost wages. The JSS is due to commence operation on 1 November 2020 and will replace the Coronavirus Job Retention Scheme (CJRS).
Businesses that remain open but continue to face reduced demand are eligible for support through “JSS Open,” a retitling of the original JSS announced on 24 September 2020. Businesses that are legally required to close due to tighter local or national restrictions can get support through “JSS Closed”—again, a retitling of the expanded JSS announced on 9 October 2020.
The key changes to JSS Open are that employees must work a minimum of 20 percent of their normal hours (previously 33 percent), which are to be paid as normal by the employer. Employees will receive two-thirds (or approximately 67 percent) of their normal pay for the hours not worked—5 percent will be paid by the employer (previously 33 percent) and the remaining 62 percent by the government. The employer contribution will be up to a cap of £125 per month and the government contribution up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73 percent of their normal wages, where their usual wages do not exceed £3,125 per month.
No significant changes have been made to JSS Closed. The government’s position remains that eligible businesses will receive two-thirds of each employee’s normal pay, up to a maximum of £2,083.33 a month.
It is worth noting that businesses can claim support under both JSS Open and JSS Closed at the same time for different employees. For example, a gym in a hotel may be required to close but not the hotel itself. However, employers cannot claim for a single employee under both schemes at the same time.
The following applies to both JSS Open and JSS Closed:
- National Insurance contributions (NICs) and pension contributions remain payable by the employer.
- Employers and employees must reach written agreements, including provisions in respect of any changes to employees’ working hours.
- Employers may top up employees’ pay “above the level of minimum contributions at their own expense if they wish.”
- “Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.” It is unclear whether this includes employees serving notice for reasons other than redundancy.
- Employers can make claims from 8 December 2020. Once approved, payments will be granted monthly, in arrears.
- Neither employers nor employees need to have previously used the CJRS to be eligible for the JSS.
- Employers may claim the JSS and the Job Retention Bonus in respect of the same employee, subject to eligibility criteria.
- The government has published a policy paper containing further details on both JSS Open and JSS Closed. Additional guidance is expected shortly.