In a package of support measures being introduced as a consequence of a second national lockdown for England, the Coronavirus Job Retention Scheme (CJRS) is being extended. The scheme will now remain until the planned lifting of the lockdown on 2 December.
As part of the Winter Economy Plan Chancellor Rishi Sunak announced the introduction of the government’s new Job Support Scheme (JSS). There have been two revisions to the plan since then. The JSS was due to be introduced from 1 November but will now start following the end of the CJRS.
Extended CJRS – government support
The extended CJRS applies to all of the UK. The scheme will follow the flexibility of the CJRS and so can be used for employees for any work pattern including full-time furlough.
Employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. Calculations will broadly follow the same methodology as under the CJRS. Employees can top up employee wages if they wish. Employees will be paid for worked hours by their employer on the terms in their employment contract.
Under the scheme employers can claim for the salary received by the employee for hours not worked. Employers will need to cover the employer Class 1 National Insurance contributions and employer pension contributions.
There will be no gap in support between the previously announced end-date of CJRS and the extended CJRS.
Extended CJRS – eligibility
All employers with a UK bank account and UK a PAYE scheme can make a claim. Neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to make a claim under the extended CJRS.
Employees notified by RTI submission to HMRC on or before 30th October will be eligible. In order to give potential support to employees who have recently been made redundant, employees employed as of 23 September and notified to HMRC by RTI on or before that date, can be rehired and placed on the extended CJRS.
Extended CJRS – HMRC guidance
HMRC guidance is still being developed. Below are some links to guidance which will be updated (and continue to be updated) in the next few days:
Which employees can be put on CJRS: https://bit.ly/3enpXoU
Reporting employees’ wages: https://bit.ly/32bbx6y
Claim for wages: https://bit.ly/3kZQmvu
How much you can claim: https://bit.ly/3mOKjdR
Moving to the JSS
When the extended CJRS comes to an end employers will need to decide whether to allow employees to return to normal working hours. Alternatively, they can move employees onto the JSS or make them redundant if their jobs are no longer viable, in which case normal redundancy rules will apply.
Following the initial announcement of the JSS the Chancellor announced an extension of the JSS. The Job Support Scheme Closed (JSS Closed) is designed to provide further support for businesses that have been legally required to close as a direct result of the COVID-19 restrictions set by one or more of the four governments of the UK. On 22 October the government revised the JSS to increase the scale of support available and renamed it JSS Open.
The JSS Open and JSS Closed are now intended to run from the end of the extended CJRS until 30 April 2021. The government will however review the terms of the schemes in January.
Job Support Scheme Open
For employers to participate in the scheme:
- employees will need to work a minimum of 20% of their usual hours
- for every hour not worked, the employer will pay 5% of the employee’s ‘usual hourly wage’ up to a cap of £125
- for every hour not worked, the government will pay 61.67% of the employee’s ‘usual hourly wage’
- the government contribution will be capped at £1,541.75 per month
- Class 1 employer National Insurance contributions and pension contributions will be due on the employee’s earnings and will be payable in full by the employer.
The caps are based on a monthly reference salary of £3,125. ‘Usual wages’ calculations will follow a similar methodology as those for the CJRS.
Employers must agree the temporary working arrangement for shorter hours in writing with employees. Employees do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven consecutive days.
Employees using the scheme will receive at least 73% of their pay, where the employer and government contributions have not been capped. Please see the example in the Appendix to this letter for further details of how the government support will be calculated.
The employer will be reimbursed in arrears for the government contribution. The employee must not be on a redundancy notice.
Job Support Scheme Closed
The JSS Closed will provide temporary support to businesses whose premises have been legally required to close as a direct result of COVID-19 restrictions set by one or more of the four governments of the UK. This includes premises restricted to delivery or collection only services from their premises. However, businesses required to close as a result of specific workplace outbreaks by local public health authorities will not be eligible for the scheme.
Employers must be instructed to and cease work for a minimum of seven consecutive calendar days.
Employers will be required to cover employer NICs and automatic enrolment pension contributions in full, where applicable, but are not required to make further contribution to wage costs.
Employers will need to agree the scheme with relevant employees, making any changes to the employment contract by agreement, and notify employees in writing.
The grant per eligible employee will be two thirds of their ‘normal pay’ up to a limit of £2,083.33 per month. The government will provide further detail on how normal pay is calculated.
Employers will be able to use the JSS Closed whilst their premises are closed and move employees onto the JSS Open if they are eligible when they are able to re-open.
Employees cannot be made redundant or put on notice of redundancy during the period their employer is claiming the grant for that employee.
The JSS schemes will be open to all employers with a UK bank account and a UK PAYE scheme. They will be open to such businesses even if they have not previously used the CJRS.
All small and medium-sized enterprises will be eligible and will not be subject to financial assessment. However, for the JSS Open scheme, large businesses will have to meet a financial assessment test. The scheme is only available to large businesses whose turnover has stayed level or is lower now than before experiencing difficulties from COVID-19. The government also expects that large employers will not be making capital distributions (such as dividends and share buybacks), while using the scheme.
Employers can top up employee wages if they wish.
How we can help
Please be assured we are here to provide you with support and please contact us if you have any queries on the CJRS and the JSS.