Yesterday (22 October 2020), Chancellor Rishi Sunak announced an increase in government contributions for the Job Support Scheme, the successor to the Coronavirus Job Retention Scheme (“CJRS”).
Increased support under the Job Support Scheme
The Job Support scheme, which comes into effect on 1 November 2020, has two elements:
The Job Support Scheme Open (“JSS – Open”), for businesses which remain open; and
The Job Support Scheme Closed (“JSS – Closed”), for those that are legally required to close.
All eligible businesses, regardless of the local tier level and previous use of CJRS, can make use of the JSS – Open; however, eligibility requirements do apply.
In light of the announcement, a new government factsheet explains how JSS – Open has changed:
Employees must work at least 20% of their normal hours (down from 33%) and be paid their contracted wages for those hours, by their employer;
The employer contribution for non-worked hours will be cut to 5% (down from the original contribution of 33%) with a cap of £125 per month. Employers must pay the full cost of NICs and automatic enrolment pension contributions;
Employers can top up employees’ wages above the 5% contribution at their own discretion;
The government will contribute 61.67% of wages for non-worked hours, up to a cap of £1,541.75 per month; and
Employees will take home at least 73% of pay for working 20% of their hours.
The government factsheet contains a number of worked examples showing how the amended JSS – Open will work in practice, which employers should consider.
The government have stated that employers using the JSS – Open, will be able to claim the Job Retention Bonus (“JRB”) for each employee that meets the eligibility criteria of the JRB.
Except for the increased levels of financial contributions, the original stipulations of the JSS - Open continue to apply. A policy paper on the JSS – Open and JSS – Closed, providing further detail, can be read here.
Employers will be able to make a claim under JSS - Open from 8 December 2020. The JSS - Closed is for businesses legally required to close, and remains unchanged, details can be read here.
Sobia Ahmad (pictured) comments: “The additional financial support now available under the reconfigured JSS – Open is welcome news for businesses impacted by the tiers of restrictions and the tough economic outlook. Coupled together with the JRB, the updated scheme may offer viability to at risk jobs, until at least February 2021. We are still awaiting government guidance about the Job Support Scheme, but should you wish to discuss this further do contact a member of the Howes Percival Employment Team.”
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