The Coronavirus Job Retention Scheme ends in December 2020 (it had originally been due to end on 31 October, but on that date it was extended to run until December). It is to be replaced by the Government’s Job Support Scheme (JSS) which will run until the end of April 2021. The information on this page includes the changes to the scheme announced on 22 October 2020, and the further details in the Government’s policy paper issued on the same day.
There are two types of JSS, ‘JSS Open’ and ‘JSS Closed’. The JSS Open applies where employers are operating but facing decreased demand due to coronavirus and the JSS Closed applies where employers are legally required to close their businesses as a direct result of coronavirus restrictions.
In terms of the application of both the JSS Open and JSS Closed to local authorities and other public bodies, the Government’s policy paper indicates that all employers will be eligible to use the schemes provided they have a UK bank account and UK PAYE scheme. However, it also states that ‘organisations that have staff costs that are fully publicly funded (even if they are not in the public sector), should use that money to continue paying their staff, and not use the JSS.’ It further provides though that ‘organisations can use the scheme if they are not fully funded by public grants, for the proportion of their revenue disrupted due to coronavirus’.
In respect of that the paper says that organisations looking to use the scheme who are not fully funded by public grants should contact their sponsor department for further guidance. We have contacted MHCLG who have confirmed that they do not intend producing any further guidance for local authorities so we assume that authorities should use the same process as other employers.
Further details of the JSS Open and JSS Closed are set out below.
JSS Open
The stated aim of the JSS Open is to protect viable jobs in employers who are facing lower demand over the winter months due to coronavirus, to help keep their employees attached to the workforce. The main provisions of the JSS Open are as follows:
- The employee must work at least 20% of their hours for the JSS Open to apply.
- The employer will continue to pay its employee for the time worked, but the burden of hours not worked will be partially split between the employer and the Government.
- The Government will pay 61.67% of hours not worked up to a cap of £1,541.75 per month, with the employer contributing a further 5% (up to a cap of £125 per month). This will ensure employees earn a minimum of 73% of their normal wages, where the Government and employer contributions have not been capped. Employers may top up that amount should they wish.
- Employer NICs and pension contributions will remain payable by the employer.
- Large employers with 250 or more employees on 23 September 2020 will need to complete a Financial Impact Test to evidence that their income has been impacted due to coronavirus. Further details of the test are in section 2.3 of the Government’s Policy Paper.
The Government has produced a Job Support Scheme Open Factsheet although further details of the practical application of the scheme are still awaited.
JSS Closed
Where a business is required to close its premises due to local or national coronavirus restrictions, the JSS Closed provisions will apply.
The main provisions of that are as follows:
- The employee’s primary place of work must be at the premises which are legally required to close and the employee must be instructed to and cease work for a minimum of 7 consecutive days.
- It will not apply where businesses are required to close by local public health authorities as a result of specific workplace outbreaks.
- The amount that is available per eligible employee is two-thirds of their normal pay up to a limit of £2100 per month, and employers may top up that amount should they wish.
- Employer NICs and pension contributions will remain payable by the employer.
It is important to keep in mind that the JSS Closed applies where employees cannot work where premises have had to close due to coronavirus restrictions; it does not require that the employer’s organisation is closed as a whole. Therefore, it may be available where for example a local authority has had to close leisure premises. The JSS factsheet (pdf) does though say that “employers will only be able to use the scheme for employees who cannot work (paid or unpaid) for that employer”. That suggests employers may only be able to claim where the employee cannot be redeployed or work elsewhere, including at home.
Other provisions applying to both the JSS Open and JSS Closed
- In order to be eligible, the employee must have been on the payroll between 6 April 2019 and 11.59pm on 23 September 2020. This means a Real Time Information submission notifying payment to that employee to HMRC must have been made at some point in that time period.
- Employers will be able to claim in arrears from 8 December 2020. More detail on how to claim is expected soon.
- If an employee ceased employment after 23 September 2020, but they were re-engaged afterwards, the employer can claim for them.
- Employees can be on any type of contract, including zero hours or temporary contracts.
- Employers should discuss the changes with the employee and make the appropriate changes to the employment contract by written agreement. This can be done by collective agreement with the trade union where the relevant term is governed by collective agreement. Any agreements must be kept for 5 years and be available to HMRC on request.
- Employees do not need to have been furloughed under the Coronavirus Job Retention Scheme to be eligible.
- Employers cannot claim for an employee who is made redundant or who is serving their notice during the claim period.
- Employers using either type of Job Support Scheme will be able to claim the Job Retention Bonus for employees if they have previously claimed payments for those employees under the Coronavirus Job Retention Scheme and they retain them in employment until 31 January 2021 if they meet the other eligibility criteria.