New Changes to the Job Support Scheme

22 October 2020 - Elizabeth Nichols

Rishi Sunak has announced revisions to the Job Support Scheme (JSS) which is designed to replace the Coronavirus Job Support Scheme (or furlough) in November.
Under the modified scheme, employers will now pay less and staff can work fewer hours before they qualify, while the taxpayer subsidy has been doubled. The aim is to help struggling firms that have not been made to shut but who are suffering with reduced trade, such as restaurants and pubs.
What has changed?
Today’s announcement reduces the employer’s contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, which means that those employees working just one day a week will now be eligible. As an example, if someone was being paid £587 for their unworked hours, the government will now contribute £543 and their employer only £44 plus the employer’s NIC and pension contributions.

Employers will continue to receive the £1,000 Job Retention Bonus. The Job Support Scheme for businesses legally required to close remains unchanged.

How it works

  • The Job Support Scheme (JSS) starts on 1 November. For every hour not worked, the employee will be paid up to two-thirds of their usual salary.
  • The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month (this is more than double the previous maximum payment). The cap is set above median earnings for employees in August of £3,125 per month.
  • Example: a typical full-time employee in the hospitality industry is paid an average of £1,100 per month. Under the Job Support Scheme for open businesses, they will still take home at least £807 a month. All the employer needs to pay is a total of £283 a month or just £70 a week; the government will pay the rest.  

Will employers still be able to claim the Job Retention Bonus?
Yes, employers using the JSS scheme will still be able to claim the Job Retention Bonus (JRB) for each employee that meets the eligibility criteria of the JRB. This is worth £1,000 per employee. Taking JSS and JRB together, an employer could receive over 95% of the total wage costs of their employees if they are retained until February 2021.

Help for the Self Employed
he government will provide two taxable SEISS grants to support those experiencing reduced demand due to COVID-19 but are continuing to trade, or temporarily cannot trade.

It will be available to anyone who was previously eligible for the SEISS grant one and grant two, and meets the eligibility criteria.

Grants will be paid in two lump sum instalments each covering 3 months. The first grant will cover a three-month period from the start of November 2020 until the end of January 2021. The government will pay a taxable grant which is calculated based on 40% of three months’ average trading profits, paid out in a single instalment and capped at £3,750.

The second grant will cover a three-month period from the start of February until the end of April 2021. The government will review the level of the second grant and set this in due course.

Business Grants
The government is also providing additional funding to allow Local Authorities (LAs) to support businesses in high-alert level areas which are not legally closed, but which are severely impacted by the restrictions on socialising.

It will be up to Local Authorities to determine which businesses are eligible for grant funding in their local areas, and what precise funding to allocate to each business. As a guide, businesses that are eligible may be given a grant via their LA that will be :  

  • £934 a month for properties with a rateable value of £15,000 or under
  • £1400 a month for properties with a rateable value of between £15,000-£51,000
  • £2100 per month for properties with a rateable value of £51,000 and above

This is equivalent to 70% of the grant amounts given to legally closed businesses (worth up to £3,000/month).

More details on the revised Job Support Scheme can be found here.

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