The UK Government has announced that it is expanding its Job Support Scheme ('JSS'). Details on the scheme as originally announced can be found here.
The stated intention of the original JSS is to protect 'viable jobs'; in practice, this means jobs where there is currently sufficient work to occupy the employee for at least 33% of their normal hours.
Now the Government has gone further, announcing that the scheme will cover 'furloughed' jobs within businesses that are 'legally required to shut' for some period over winter as a result of coronavirus restrictions. These businesses will be eligible to receive larger JSS grants than businesses that are not forced to close by a lockdown.
Detailed guidance is expected in due course. In the meantime, answers to some of the most frequently asked questions can be found below.
When does the expanded scheme open and for how long will it run?
As with the original scheme, the expanded scheme will open on 1 November and will run for six months, until the end of April 2021. However, the Government has stated there will be a review point in January 2021.
In line with the rest of the scheme, employers will be able to claim payment under the scheme in arrears. Claims can be made from December.
Which employers can claim under the expansion to the Job Support Scheme?
Under the expansion, all businesses whose premises are legally required to shut as part of local or national Covid–related restrictions are potentially eligible to claim grants to pay the wages of staff who cannot work. (Businesses closed by local public health authorities because of specific workplace outbreaks of Covid-19 will not be eligible.)
No specific limitations on the size or finances of the businesses have been announced, but the Government's expectation (as with the original scheme) is that large employers using the scheme will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant.
Which employees are covered by the expansion?
To be eligible for a grant under the expansion, the employee must not be working. (This is different from the rest of the scheme, under which grants are only available if the employee works at least 33% of their normal hours.)
In line with the rest of the scheme, the employee must have been on the employer's payroll on or before 23 September 2020.
Businesses will only be eligible to claim the grant while they are subject to restrictions and the employee must be off work ('furloughed') for a minimum of seven consecutive days.
What does the employer need to do to place employees on the expanded scheme?
In addition to ensuring that the eligibility criteria are met, the employer must agree the new scheme with the employee, make any changes by agreement to the employment contract (eg to hours and pay provisions) and notify the employee in writing. This agreement must be made available to HMRC on request.
How much can employers claim per employee and how much does the employee receive under the scheme?
In line with the rest of the Job Support Scheme, the employee
will receive up to 2/3 of their usual hourly wage for every hour
they do not work. However:
- this 2/3 contribution will come exclusively from the Government (which differs from the rest of the scheme, under which businesses that are not legally required to close must contribute 1/3 of the wage cost for non-worked hours);
- this 2/3 contribution from the Government will be capped at £2,100 per month (which is a larger cap than applied to the Government's contribution under the rest of the scheme).
Although the scheme does not require the employer to make a contribution towards the basic wage cost for these 'furloughed' employees, the employer will have to pay Class 1 employer National Insurance contributions and any pension contributions in respect of them.
When will the grant be paid?
In line with the rest of the scheme, grant payments will be made in arrears, via a HMRC claims service that will be available from early December.
Can an employee's wages be covered by the expanded scheme if they are under notice of redundancy?
In line with the rest of the scheme, the answer is 'no'. The purpose of the scheme is to protect jobs. It will not be possible to make employees redundant or give them notice of redundancy whilst a grant is being claimed in respect of them.
When the premises re-open, can employees be transferred to the original Job Support Scheme if only reduced hours are available to them?
Yes, there is nothing preventing a claim under the original scheme in this situation if the eligibility requirements are met.
Are there any other rules of the expanded scheme to be aware of?
The Government has said employers can top up the wages of staff 'furloughed' under the expanded scheme. However, guidance is still awaited on the question of whether wages can be topped up under the scheme as originally announced.
HMRC intend to publish the name of employers who have used the scheme, and employees will be able to find out if their employer has claimed for them. HMRC will continue to operate a hotline for individuals to make reports of fraudulent claims.
What other support will be available to businesses forced to shut?
The Government has said it is increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs. These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously.
The Job Retention Scheme also sits alongside the £1,000 Job Retention Bonus ('JRB') scheme.
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