Extension of the Job Support Scheme
It was welcome news for thousands of UK businesses today as the Chancellor announced an extension of the Job Support Scheme.
Employees who work for UK firms forced to shut by law because of coronavirus restrictions are to get two-thirds of their wages paid for by the government.
The scheme will begin on 1 November and run for six months.
The government’s Job Support Scheme (JSS) will be expanded to protect jobs and support businesses.
- The government will pay two thirds of employees’ salaries to protect jobs over the coming months
- Cash grants for businesses required to close in local lockdowns will also be increased to up to £3,000 per month
Under the expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work.
The government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions, a very small proportion of overall employment costs. It is estimated that around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
In addition to expansion of the JSS, the government 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. This could benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs, bowling alleys and many more.
These measures will sit alongside the original JSS – which is designed to support businesses that are facing low demand over the winter months – and the £1,000 Job Retention Bonus (JRB) which encourages employers to keep staff on payroll.
Points to note on the high-level details announced so far:
- As employers can only claim on a monthly basis commencing from December 2020, staff salaries will need to be funded upfront by employers and subsequently claimed back. This means that businesses with no income could be required to pay for up to 6 weeks of staff wages before they receive the grant from the government.
- To qualify for the CJRS bonus, employees need to earn an average of £520 per month between November to January. Under the new extended JSS, employers will be able to “top up” staff wages therefore we recommend that where CJRS bonus qualifying employees may not be paid £520 under the JSS, employers should consider topping up to this level to ensure they still qualify for the CJRS bonus.
- This scheme will cover businesses that are legally required to close their premises. It includes those restricted to delivery or collection only services. Some businesses may therefore end up using a combination of the original JSS rules (e.g. for kitchen and delivery staff) and the new JSS announcement for other staff (e.g. bar staff that can no longer work).
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