HMRC has published a policy paper containing more details on the Job Support Scheme.
The schemes will now be known as JSS Open and JSS Closed, the latter being for those businesses which have been required to close under lockdown regulations.
Under JSS Open, an employee will need to work at least 20% (no longer 33%) of their normal hours. They will receive normal pay for the hours they work, and two-thirds of pay (subject to a cap which bites against those earning more than £3,125 a month) for the hours they do not work. For that two-thirds top-up, the government will pay 61.67% and the employer will pay 5%, plus NI and pension contributions on the full amount. That is a significant change from the previous 50:50 split towards the two-thirds top-up, shifting the financial cost overwhelmingly to the public purse. There must be a written agreement between employer and employee, agreeing to the changes.
Under JSS Closed, the position remains that the employee will receive two-thirds of their normal wages, funded by the government (again, with a cap biting against those who earn more than £3,125pm). The employer will have to pay the NI and pension contributions on that amount. Again, there must be a written agreement between employer and employee, agreeing to the changes.
IMPORTANT: I have prepared template agreements for both the JSS Open and JSS Closed schemes, which are available free to members of the HR Inner Circle or Getting Redundancy Right - new members welcome.
The following applies to both schemes.
Employers can top up wages beyond the amounts provided for in the scheme. This is another change; the first version of the JSS indicated government expectation was that employers would not top-up wages beyond the scheme.
All SMEs are eligible, and large business are eligible if their turnover has fallen due to coronavirus (according to their VAT returns). The government says it discourages, but will not prohibit, a large business from claiming on the JSS if it is making capital distributions (such as dividend payments).
Fully funded public sector employers cannot claim, but public sector employers who receive funding at least in part from private sources can claim if their private funding has been disrupted.
Employers will claim in arrears for salary monies already paid. The first claims can be made from 8 December 2020 (ie 5 weeks after the scheme opens on 1 November) via an online portal, similar to the Coronavirus Job Retention Scheme.
Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period. It is unclear whether this covers employees serving notice for reasons other than redundancy.
To calculate the amount of pay: for employees who are paid a fixed salary, the 'Reference Salary' is the greater of:
- the wages payable to the employee in the last pay period ending on or before 23 September 2020
- the wages payable to the employee in the last pay period ending on or before 19 March 2020, this may be the same salary calculated under the CJRS scheme
For those who receive variable pay, the 'Reference Salary' is the greater of:
- the wages earned in the same calendar period in the tax year 2019 to 2020
- the average wages payable in the tax year 2019 to 2020; or,
- the average wages payable from 1 February 2020 (or the employee’s start date if later) until 23 September 2020
There are complex rules to work out 'normal hours' in sections 5.2 and 5.3 of the policy paper.
A Treasury Direction is expected to be issued soon.