Partner Sue Dowling, head of our Employment Law team, outlines the latest changes to the Job Support Scheme, announced by the Chancellor on 22 October.
Chancellor Rishi Sunak said yesterday that businesses faced “profound economic uncertainty”, as he announced further changes to the Job Support Scheme (JSS) that will take effect from 1 November 2020, after the current Coronavirus Job Retention (“Furlough”) Scheme ends.
He continued: “I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today. These changes mean that our support will reach many more people and protect many more jobs.”
Under the ‘Plan for Jobs’ umbrella and as part of the Government’s Economy Plan, the following changes have been announced:
Job Support Scheme (JSS)
A comparison of the level of support initially announced as part of the JSS, with the updated levels confirmed yesterday, looks like this:
|Initial Level||New Level|
|Minimum proportion of usual hours that an employee must work to qualify under the JSS
|Proportion of unworked usual hours paid by employer
|33%||5% (up to a cap of £125 per month).|
|Proportion of unworked usual hours paid by Government||33%||61.67% (capped at £1,541.75 per month)|
To qualify, workers must have been on their employer’s payroll since 23 September 2020. Their employer will be responsible for paying them as usual for the hours actually worked, and an employee must work at least 20% of their ‘usual’ hours to qualify. Under the Scheme, the Government has said that workers will be paid at least 73% of their wages, although this will only be the case where the particular employee earns £3,125 a month or less.
By reducing the employer contribution (in relation to unworked hours) to only 5% (from the original percentage of 33%), thereby reducing the financial pressure on employers, the Government hopes this will make the JSS more attractive and viable in terms of job retention.
Employees can be moved on and off the Scheme, and their hours can change, but each arrangement must run for a minimum of seven days. Workers cannot be made redundant or put on notice of redundancy whilst their employer is claiming under the JSS. The JSS will run for six months from 1 November, and then be reviewed.
The precise terms of the JSS are complicated (for example how “usual hours” is defined) and the above only presents a simple summary.
Employers will continue to be eligible for the £1,000 Job Retention Bonus.
The proportion of normal profits for which a self-employed individual can claim, under the Self Employment Income Support Scheme (SEISS), has been increased from 20% to a taxable grant of 40%, capped at a maximum of £3,750 (up from £1,875).
This will cover the period 1 November – 31 January 2021, with a second grant, full details of which may be determined nearer the time, available for self-employed individuals to cover the period from February 2021 – April 2021.
Mr Sunak also confirmed further funding, through cash grants of up to £2,100 per month, primarily for businesses in the hospitality, accommodation and leisure sectors who are adversely affected by restrictions in their area. Businesses will be able to claim grants retrospectively, if they are located in an area that has already been subject to restrictions. These grants are in addition to more significant funding awarded to local authorities placed in Tier 3, to support communities and businesses.
For further information or legal advice, please visit www.blandy.co.uk.