New Job Support Scheme introduced by the Government

24th September 2020

The Chancellor has made his statement and the Treasury have issued the press release.

For convenience the details in the press release about the new Job Support scheme are set out below. The press release also sets out the new approaches to business loans and VAT.

Note that already there has been misreporting of the scheme with newspapers, the BBC, Sky and initially Daniel Barnett reporting that the Government would pay the two thirds of remaining hours lost where an employee in a viable job  works at least a minimum of 33% of their hours. The Chancellor clearly said: that to protect viable jobs the Government together with the employer will then increase those workers’ wages covering two thirds of the pay they have lost, i.e. the employer and the Government will share paying the cost of the remaining two thirds. You will see this below and this is reflected in the post just put out by the Treasury on Twitter which further confirms that the ‘split’ is that the Government and the employer will pay 1/3 of the wages each.

Note two other points:

  1. The scheme will only apply to protect ‘viable’ jobs, hence the requirement that employee still work t least 1/3 of their hours.
  2. Missing from the press release is the Chancellor’s very clear statement in Parliament that the support will be targeted. He stated that all small  and medium size businesses will be eligible but the JSS will only apply to larger businesses where their turnover has fallen through the crisis.

As with the CJRS, further details will follow to put the flesh on the bones.

Support for workers

A new Job Support Scheme will be introduced from 1 November to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus.

Under the scheme, which will run for six months and help keep employees attached to the workforce, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.

Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.

This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can’t work.

In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.

The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme, with further guidance being published in due course.

It is designed to sit alongside the Jobs Retention Bonus and could be worth over 60% of average wages of workers who have been furloughed – and are kept on until the start of February 2021. Businesses can benefit from both schemes in order to help protect jobs.

In addition, the Government is continuing its support for millions of self-employed individuals by extending the Self Employment Income Support Scheme Grant (SEISS). An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.

An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April – ensuring our support continues right through to next year. This is in addition to the more than £13 billion of support already provided for over 2.6 million self-employed individuals through the first two stages of the Self Employment Income Support Scheme – one of the most generous in the world.

Should you require any assistance with your employment arrangements during this difficult period, do not hesitate to contact the co-head partners of our employment department.  Ewan Keen can be reached on 020 3206 2724 or Tamara Ludlow on 020 3206 2739.