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

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.

This article covers the following topics:

What is the Job Support Scheme?

How the Job Support Scheme works

Job Support Scheme expansion

Additional government support

Key dates for the Job Support Scheme

What the Job Support Scheme means for your payroll

How to apply for the scheme

What is the Job Support Scheme?

The JSS is a grant from the government that aims to partially pay the salary of employees who are working reduced hours because of coronavirus disruption as part of a short-time working arrangement.

It's effectively a successor to the Coronavirus Job Retention Scheme (JRS), which ends for employees at the end of October 2020.

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

How the Job Support Scheme works

There are two elements to the Job Support Scheme.

The first was announced in September 2020 as part of the wider Winter Economy Plan.

The second part was announced in October 2020 as an expansion to the scheme to assist businesses forced to shut down due to coronavirus restrictions. It's explained under the Job Support Scheme expansion heading below.

The original JSS announced in September allows you to claim a grant from the government to cover a third of an employee's usual salary for the hours not worked (up to a cap), provided they work a minimum of 33% of their usual working time.

However, as an employer, you're also required to contribute.

The employee must have been paid and included in a Real-Time Information (RTI) update to HMRC on or before 23 September 2020.

But there's no need for the employee to have already been part of the Coronavirus Job Retention Scheme, and you can cycle employees on and off the JSS to suit your business needs (although the working arrangement must cover a minimum period of seven days).

As with the JRS, you'll pay the employee's salary and then claim the grant from the government, with the same requirement of needing to run a UK PAYE payroll and have a UK bank account.

Unlike the JRS, you can only claim the JSS grant in arrears and it's paid the following month.

Effectively, you'll pay the employee for their time worked, and then contribute a third towards their salary for the hours not worked.

The government will also contribute a third towards this part of their salary, capped at £697.92 per month, which, as mentioned, you claim retrospectively.

This will ensure the employee receives at least 77% of their normal wages.

The employer needs to fund the employer's National Insurance and auto-enrolment pension costs for the employee.

The JSS lasts for six months as of 1 November 2020. It will be reviewed in January 2021, at which point the conditions and grant amount might be adjusted.

Job Support Scheme expansion

In October 2020, the government announced an expansion to the Job Support Scheme to support businesses that are required to close due to coronavirus restrictions.

For businesses that are ordered by one of the UK's four governments to close, the grant will 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 still needs to pay the employer's National Insurance and auto-enrolment costs.

Notably, the JSS does not 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 expansion rules vary compared to the ordinary JSS in other ways.

For example, the extension to the scheme only covers employees who have been 'instructed to and cease work in eligible premises' - and who therefore cannot work for the employer, regardless of the employer's wishes.

The minimum period for which work must cease for each employee is seven consecutive days, and claims must not overlap. As with the JSS, claims are made monthly in arrears.

To make use of the JSS expansion, your business will need to have had a UK PAYE scheme registered and an RTI submission made on or before 23 September 2020.

Additional government support

In addition to the Job Support Scheme, the government has announced further financial support, which will be available to businesses.

The terms of the Local Restrictions Support Grant (which will be administered by local authorities in England) have changed, meaning businesses will be able to receive up to £3,000 for each month that they're closed due to coronavirus restrictions.

Payment eligibility is changing too, with the grant being available from two weeks of businesses being closed instead of three weeks.

For the governments in Scotland, Wales and Northern Ireland, they'll have access to an additional £1.3bn towards their guaranteed funding for 2020-21, which can be used for schemes similar to the support grant in England.

Key dates for the Job Support Scheme

There are several key dates for the Job Support Scheme (and for the end of the Coronavirus Job Retention Scheme):

1 November 2020

The date from which the JSS grants apply. You'll be able to claim for hours/days for which employees are working reduced (or zero) hours as a result of coronavirus from this date.

1 December 2020

The first date that you can put in a JSS grant claim.

January 2021

At some point this month, the JSS (both original and expansion) will be reviewed by the government. Additional measures or restrictions may be put in place.

31 January 2021

If you have employees who were furloughed under the original Coronavirus Job Retention Scheme, who were paid in excess of the minimum income threshold and are still employed (that is, not within a contractual or statutory notice period), you can claim the £1,000 Job Retention Bonus.

The bonus must be claimed between 15 February 2021 and 31 March 2021.

30 April 2021

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

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.

What the Job Support Scheme means for your payroll

Those running a payroll have a number of issues to take into account. 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 earlier JRS 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 education 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 original JSS 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.

How to apply for the scheme

The JSS grant can be claimed just like the JRS, which is to say, you claim 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 that isn't yet available. We'll update this blog when it is.

Conclusion on the Job Support Scheme

The Job Support Scheme delivers help for businesses when they need it most, but also brings with it additional complexities compared to the existing JRS 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.

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