Our payroll team are inundated with questions on the recently announced Job Support Scheme from clients looking to find out how this could impact their businesses from November.
In this article, we share the most frequently asked questions and corresponding answers with you.
The scheme will commence on 1 November 2020 and is expected to run for 6 months. The JSS will take over from the Coronavirus Job Retention Scheme (CJRS), which is to end on 31 October 2020.
Any employer that has a UK bank account and runs a UK PAYE scheme is eligible to claim JSS.
However, for large businesses, the scheme is only available for those whose turnover has been impacted negatively by the coronavirus pandemic. These businesses will need to meet a financial assessment test. Large companies should not make any capital distributions such as dividends or share buybacks.
Employers do not need to have utilised the CJRS previously to claim the Job Support Scheme.
Employees must have been on their employers’ PAYE payroll system before 23 Sept 2020.
Employees must work at least 33% of their usual hours. However, the government may increase the minimum hours worked in 3 months.
An online portal will be available from December 2020 for employers to claim the JSS grant. The grants are to be claimed monthly, in arrears.
HMRC will also check the basis for claims, and payments may be withheld or repayment required if found fraudulent. The JSS grant is only to be used for the reimbursement of incurred wages.
The government’s intention is that an employee will be informed by HMRC directly of the claim details.
Employers will continue to pay employees their usual contracted rate for the hours that they work. However, to qualify for the scheme, the employee must work at least 33% of their normal hours.
For the remaining hours not worked, the government will cover a third of the value of an employee’s usual paycapped at £697.92 per month.
The employer will pay a further third of the employee’s unworked normal hours. The final third of the unworked hours will remain unpaid.
Therefore, as an employee, you will receive a minimum of 77% of your normal pay of which a minimum 55% will be paid by your employer, and a maximum 22% by the government scheme (capped at £697.92).
Class 1 National Insurance contributions and pension contributions remain payable by the employer.
HMRC have provided the following breakdown guideline.
|Hours employee worked||33%||40%||50%||60%||70%|
|Hours employee doesn’t work||67%||60%||50%||40%||30%|
|Employee Earning (% of normal)||78%||80%||83%||87%||90%|
|Government Grant |
(% of normal wages)
|Cost to Employer (% of normal wages)||55%||60%||67%||73%||80%|
For employees, “normal hours” are the usual hours you work as per your contract of employment or, for employees working irregular hours, this is based on either the equivalent month the year before or an average of the last 12 months, whichever is higher.
For furloughed staff, ”normal hours” are the actual hours you worked before you were placed on the CJRS scheme.
Yes, it is still possible for you to work more than a third of your usual hours. This is just the minimum criteria to qualify for the JSS.
The scheme is designed to apply to employees whose employers only require them to work fewer hours than they are contracted for as a result of COVID-19 impacting demand.
In most cases, this scheme will see a reduction in wages, as well as a change to your working hours. Employers will need to get consent for any changes to working arrangements and to be paid under the JSS.
No. Your employer can not give you a redundancy notice whilst being paid on the JSS.
However, an employer can move their employees off and on the scheme. Therefore, there is a possible risk of redundancy when you are no longer on the JSS, in which case statutory redundancy procedures may apply.
The scheme has been designed to support workers who are in viable jobs.
Employees may move on and off the scheme and are not required to have the same working pattern each month. However, all working arrangements must be agreed in advance and cover at least seven days.
Do you have a question that isn’t covered in this guide? Then please get in touch with our payroll team at email@example.com. They will be able to give you further guidance and advice on salary calculations.