The “Revamped” Job Support Scheme
So here we go again – another scheme to get our heads around!
The changes announced last week are far more generous than the first Job Support Scheme, which was of little use to many of my clients.
This one – the” Job Support Scheme Open” may well be of relevance to many small businesses and works as follows:
The JSS Open Scheme
- The employee must work at least 20% of their usual hours
- For the hours not worked, the employee will still earn 67% of their normal pay – this is funded 61.67% by the government (up to a max of £1541.75 per month), and only 5% by the employer. The max salary you can base the calculations on per month is £3125.
- The employee therefore will earn at least 73% of their normal wages (see the worked example below for the maths!!)
- Employers claiming the JSS Open may still claim for the Job Retention Bonus (the £1,000 due in February for retaining furloughed staff) and the grant claimed under the JSS Open scheme can be used to help meet the minimum wage criteria for the bones scheme
Which Employers Can Claim?
- Any employer, still trading, but continuing to face reduced demand for their services, with a PAYE scheme and a UK bank account
Which Employees Can You Claim for?
- An employee had to be on the payroll between 6 April and 31 Aug (technically the RTI had to be submitted by 23 Sept) and still employed on 23 Sept
- Employees do not need to have been furloughed before to be eligible
- Employees must be working at least 20% of their usual hours
- You must reach written agreement with your employee that they have been offered a temporary working agreement, which must cover at least 7 consecutive days
How do you claim?
Further details are to be announced soon but we do know the following:
- The scheme starts on 1 November and runs until 30 April 2021
- Money is paid in arrears once your claim has been approved
- First claims can be made from 8 December
- Your accountant can make your claim for you (“phew” I hear your cry!!)
A Worked Example
Helen works full time usually – and earns £1,000 a month. She works 5 days per week
Under the JSS Open scheme, she agrees with her employer to work 1 day per week – this is 20% of her usual working hours.
Normal pay for 1 day per week – 20% x £1000 = £200
Time not worked – 80%
Of the time not worked – Helen will receive 66.67 of her normal pay – 66.67% x £800 = £533.36.
Helen’s total pay is therefore £733.36 in total – or 73% of her usual pay – for working only 20% of her usual hours!
The employer contribution is 100% for the day she worked – £200, plus 5% of the pay that she received for not working – 5% x £800 = £40. Total cost of the employer £240.
The employer is also responsible for NI and pension contributions.
The government contribute 61.67% of the pay for the time she did not work – 61.67% x £800 = £493.36
The calculation for employees who are not on fixed salaries or fixed hours is hideous – and requires a spreadsheet setting up!
Is it for me?
The new scheme is far more generous than the one originally announced, which required employees to work 1/3 of their usual hours and for employers to cover 1/3 of their wages for the period not worked.
It is therefore well worth looking into and if you require any further information or advice in connection with the scheme, please do get in touch with Rosie Forsyth.
NB: There is also the “Job Support Scheme Closed” which is for businesses legally required to close, and is not covered in this blog.