Money Matters

Job Support Scheme: How it would work and what it means for your payroll

Learn about the coronavirus Job Support Scheme, how it will work, and what it means for furloughed employees and your payroll processes.

The Job Support Scheme (JSS) was announced in September 2020 as part of the Winter Economy Plan. This was a response from the chancellor to the continuation of coronavirus (COVID-19) disruption within businesses.

We published an article about the Winter Economy Plan at that time.

Here, we take a look in detail at the JSS and, in particular, the expansion announced in October 2020 that provides grants for businesses forced to close because of coronavirus restrictions.

However, you should note that implementation of the JSS has been postponed until after 30 April 2021. The new start date has not yet been announced. We’ll update this blog when that information is available.

This article covers the following topics:

What is the Job Support Scheme?

Job Support Scheme: Basic rules to follow

Job Support Scheme (Open): How it would work

Job Support Scheme (Closed): How it would work

Key dates for the Job Support Scheme

What the Job Support Scheme means for your payroll

How to apply for the scheme

The Job Support Scheme (JSS) was to be a grant from the government that aimed to partially pay the salary of employees who were working reduced hours (or no hours) because of coronavirus disruption as part of a short-time working arrangement.

It was to effectively act as a successor to the Coronavirus Job Retention Scheme (CJRS), which now ends for employees on 30 April 2021 (originally 31 October 2020).

Its goal was to avoid unemployment via redundancy for jobs that should be viable in the long term.

There was to be two elements to the Job Support Scheme, referred to as JSS (Open) and JSS (Closed).

JSS (Open) was announced in September 2020 as part of the wider Winter Economy Plan, although it was revised in the latter part of October 2020.

As the name suggests, it was to be used by businesses able to remain open during coronavirus restrictions set by one or more of the four governments in the UK.

JSS (Closed) was announced in mid-October 2020 as an expansion to the scheme to assist businesses forced to shut down due to local coronavirus restrictions imposed by one of the four UK governments.

In both schemes, the employer was to be required to fund the employer’s National Insurance and auto-enrolment pension costs for the employee (unless employees have opted out).

The JSS was to last for six months.

It will potentially start from April 2021, but a date has not yet been announced by the government.

Below are the rules for the JSS as they were before the announcement of Coronavirus Job Retention Scheme Extended, which now runs until 30 April 2021.

These rules may yet change and it’s worth mentioning the official JSS guidelines have been withdrawn by HMRC, pending revision.

For example, the start and claim dates for the JSS have not yet been announced, and it’s likely the qualifying dates for employee inclusion will change too. Other aspects may change too.

However, to claim for an employee under either JSS scheme, the old rules said the employee must have been paid and included in a Real-Time Information (RTI) update to HMRC on or before 11.59pm on 23 September 2020.

Similarly, the old rules said that if an employee left your employment after 23 September 2020 but was subsequently rehired then you’d be able to claim for them.

But there would be no need for the employee to have already been part of the Job Retention Scheme, and you’d be able to cycle employees on and off the JSS to suit your business needs.

However, the working arrangement for the employee must have covered a minimum period of seven continuous calendar days.

As with the CJRS, you’d need to pay the employee’s salary and then claim the JSS grant from the government, with the same requirement of needing to run a UK PAYE payroll and have a UK bank account.

Unlike the CJRS, you’d only be able claim the JSS grant in arrears and it’s paid the following month.

You’d be able to simultaneously make Open and Closed claims.

Here’s an example of where that might be required.

A restaurant might be forced to close but is still able to offer a takeaway service.

The front-of-house staff are unable to work and so can be claimed for under JSS (Closed).

However, the kitchen staff are able to work albeit with less demand, so are forced to work reduced hours. These staff can be claimed for under JSS (Open).

Notably, you wouldn’t be able to make a claim in both schemes for the same person in a single claim, but that person could switch between schemes in alternate claims.

Making both Open and Closed claims in the above way might be most sensible from an auditing point of view and would also be simpler overall compared to making a single claim for both schemes.

According the revised rules announced on 22 October 2020, the JSS (Open) component of the JSS would allow you to claim a grant from the government to cover an employee’s usual salary for hours not worked because of reduced demand in your business, provided they work a minimum of 20% of their usual working time.

However, as an employer, you’d also be required to contribute.

Effectively, the end result is that you’d pay the employee for their time worked, and then contribute 5% of their salary for the hours not worked (your minimum 5% contribution would be capped at £125 per month but as an employer you can top this up if you want to).

The government would contribute 61.67% towards this part of their salary, capped at £1,541.75 per month.

This would ensure the employee receives at least 73% of pay for working 20% of their usual hours, providing they don’t earn over the £1,541.75 cap.

In October 2020, the government announced an expansion to the Job Support Scheme to support businesses that would be required to close due to coronavirus restrictions like the “very high” COVID alert level in England.

This part of the JSS is referred to as JSS (Closed).

For businesses that are ordered by one of the UK’s four governments to close, the grant would be expanded to cover two-thirds of an employee’s usual pay up to the cap of £2,100 per employee, per month.

The employer would still need to pay the employer’s National Insurance and auto-enrolment costs (unless your employees have opted out).

Notably, JSS (Closed) wouldn’t include support for businesses required to close by public health authorities due to specific workplace outbreaks, or businesses that have been ordered to close for reasons other than due to local or national restrictions.

The JSS (Closed) rules vary compared to JSS (Open) in other ways.

For example, JSS (Closed) would only covers employees who have been “instructed to and cease work in eligible premises” – and who therefore can’t work for the employer, regardless of the employer’s wishes.

As mentioned above, the minimum period for which work must cease for each employee would have to be seven consecutive days, and claims must not overlap.

There are likely to be several key dates for the Job Support Scheme when it launches. Here’s a timeline, including events so far:

24 September 2020

The JSS is announced as part of the government’s Winter Economy Plan.

22 October 2020

A revision of the JSS (Open) rules is announced, as reflected in our summaries above, and the JSS (Closed) rules were added.

31 October 2020

It’s announced that the JSS would be postponed, to allow for the Coronavirus Job Retention Scheme to be extended.

1 November 2020

The date from which the JSS was originally planned to begin. The start date will now be after 30 April 2021, but no official date has yet been provided.

1 December 2020

The first date by which you were able to put in a JSS grant claim according to the original rules.

Again, this date will be moved out to after the JSS start date.

8 December 2020

This is the date by which HMRC has said the JSS registration and claim website will be available for employers.

Again, this date will be moved out until closer to the start date of the JSS.

17 December 2020

An announcement from the government on this date extended the Coronavirus Job Retention Scheme again, from 31 March 2021 to 30 April 2021.

January 2021

According to the original JSS announcement, at some point in January the JSS (both Open and Closed elements) will be once again reviewed and possibly revised by the government.

However, this revision date will now be postponed until later because of the delayed start of the JSS.

31 January 2021

This was the date that employers using the Coronavirus Job Retention Scheme could claim the £1,000 Job Retention Bonus.

However, this has now been cancelled following the extension of the Job Retention Scheme to 30 April 2021. Another bonus scheme will be implemented instead.

30 April 2021

This is the original end date for the JSS scheme to help fund viable jobs.

However, because of the postponement of the JSS, this date will be pushed out to match the JSS start date.

This is now the end date for the Coronavirus Job Retention Scheme.

HMRC has not yet announced the last date for claiming a JSS grant, so it would be wise to monitor for announcements and ensure you claim any grants quickly upon the end of the scheme.

Those running a payroll have a number of things to take into account if they want to use the JSS when it launches. The following are a few key examples.

Understand the Job Support Scheme

Managers and employees are likely to approach you for information about how the JSS applies to them, their payslips, and their teams.

It’s vital you understand how the scheme operates, and how it applies to payroll processes.

The government is likely to release detailed information including worked examples. We’ll update this blog as more information becomes available.

Notification and contracts

If you haven’t used the CJRS and intend to use the JSS, it might be necessary to give written notification to your employees about changes to working hours or pay rates.

If the employee’s contract doesn’t permit part-time or shift working, you may need to adjust it ahead of time.

Gather information

You might need to implement a timesheet system, so you know when employees are working in the business.

Employees who were previously working on a full-time basis might need support on how to complete a timesheet.

Note that it’s fraudulent to claim a JSS grant for times when an employee was working. And you’ll also need to prove the employee has worked at least 33% of hours under the JSS (Open) rules.

So it’s vital to have 100% accurate information, and also helpful to retain this evidence, so you can prove to HMRC the actual hours worked by each employee.

Make JSS claims

Before you can claim under JSS, you must have completed the payroll (including sending the RTI data to HMRC).

The JSS must be based on the actual payroll details, and if claiming under the original JSS rules, also based on actual hours worked/not worked.

The JSS grant would be claimed in arrears once the payroll has been run and salaries paid to employees.

The claim will be made via a website created by the government, which isn’t yet available. We’ll update this blog when it is.

Conclusion on the Job Support Scheme

The Job Support Scheme would deliver help for businesses when they need it most, but also brings with it additional complexities compared to the existing CJRS and other coronavirus measures from the government.

Reading up on the scheme’s requirements and limitations as soon as possible will put you in the best position to proceed when the scheme becomes available.

Bookmark this blog and visit frequently to learn more about the JSS as more details are announced by the government.

Editor’s note: This article was first published on 20 October 2020 and has been updated for relevance.

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