Expansion of the base Job Support Scheme announced

Expansion of the base Job Support Scheme announced


By Ben Smith - 26 October 2020

Update 2 November: On 31 October the UK government announced that the furlough scheme would be extended until at least 2 December due to England entering a period of lockdown from 5 November with many businesses required to close. The furlough scheme will cover 80% of wages, but employers will need to pay National Insurance Contributions and pension contributions. The introduction of the JSS has been delayed until at least 2 December.

In mid October the government announced yet more changes to the Job Support Scheme (“JSS”). The JSS, the successor to the furlough scheme, was first announced on 24 September 2020, with a revision announced on 9 October (which applied only to those businesses required to close by law during Covid-19 restrictions). The two limbs of the JSS are now referred to by the government as JSS Open and JSS Closed.

The changes significantly alter the JSS Open, as announced on 24 September, in two ways:

1. Employees can work fewer hours: Employees will need to work only 20% (previously this was 33%) of their usual working hours to be eligible for support under the JSS.

2. Employer contributions reduced: Employers will be required to pay only 5% of salary costs for usual hours not worked, reduced from 33% under the original terms of the JSS. The government will contribute 61.67% of reference salary (by way of a reimbursement of the employer), up to a maximum of £1,541.75 a month. The JSS does not cover National Insurance Contributions or pension contributions, so employers will also be liable to make these payments. 

To recap where we stand with the eligibility for both limbs of the JSS:

The JSS Open

Which employers are eligible for JSS Open?

  • All employers with a UK, Channel Island or Isle of Man bank account and enrolled for PAYE online.
  • All small and medium businesses.
  • Large businesses only where they meet a financial assessment test (to show turnover has been negatively affected by Covid-19) and commit to not making capital distributions while receiving money from the JSS (though it is unclear at this stage what this commitment will entail).
  • There is no requirement that employers have previously claimed under the furlough scheme.
  • Employers will be able to claim both the Job Retention Bonus and subsidies under the JSS.

Which employees are eligible for JSS Open?

  • Those on the employer’s PAYE payroll between 6 April 2019 and 11:59 pm on 23 September 2020.
  • If the employee ceased employment after 23 September 2020 but was rehired, employers can claim for them under the JSS.
  • The employee must be working at least 20% of their normal working hours.
  • Written agreement must be reached between employer and employee to reduce hours and pay temporarily.
  • Employees can be moved on and off reduced hours as required, but to be eligible the employee must be covered by a written agreement to reduce hours that covers at least 7 consecutive days.
  • Employers cannot claim for employees who have been made redundant or are serving a contractual or statutory notice period during the claim period.
  • There is no requirement that the employee was previously placed on furlough.

The JSS Closed

Which employers are eligible for JSS Closed?

  • All employers with a UK, Channel Island or Isle of Man bank account and enrolled for PAYE online.
  • Where business premises at one or more locations has been legally required to close due to coronavirus 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 and those restricted to provision of food and/or drink outdoors. (This does not include workplaces required to close by local public authorities due to a workplace outbreak).
  • There is no requirement that employers have previously claimed under the furlough scheme.
  • Employers will be able to claim both the Job Retention Bonus and subsidies under the JSS.

Which employees are eligible for JSS Closed?

Further information on employee eligibility for the JSS Closed is expected by the end of October. For now, we know the following conditions apply:

  • Employees whose primary workplace is at the premises legally required to close.
  • Employees instructed to cease work for a minimum period of at least seven consecutive days.
  • Written agreement must be reached between employer and employee to reduce hours and pay temporarily.
  • Employers cannot claim for employees who have been made redundant or are serving a contractual or statutory notice period during the claim period.

For details on the JSS Closed click here.