Thursday, 5 November 2020

Furlough Scheme Extension

“FURLOUGH” SCHEME EXTENDED AT 80% USUAL PAY

On 22 October the Chancellor announced that the CJRS “furlough” scheme would end on 31 October 2020 to be replaced by a new Job Support Scheme (JSS). However, at 6.45 pm on 31 October 2020 when the Prime Minister announced a month long lockdown for England he announced that the CJRS furlough scheme would be extended for one further month with employers able to claim a grant of 80% of employees’ usual pay for hours that they are unable to work. Employers will be responsible for paying NICs and pension costs.

The replacement JSS will start when the extended CJRS ends.

JOB SUPPORT SCHEME (JSS)

The JSS scheme that replaces CJRS was originally announced in September.

It has been made more generous than in the original announcement to support businesses that are legally forced to close their premises as a direct result of Coronavirus restrictions imposed by one of the four UK governments. This is referred to as JSS Closed. 

For those employers that are able operate safely but continue to face reduced demand such that they may need extra support over the winter to help keep their employees attached to their workforce there is JSS Open. That scheme has been made more generous to encourage employers to keep their employees in a job on shorter hours rather than making them redundant.

JSS Open and JSS Closed were originally scheduled to commence on 1 November 2020 and will now commence when the extended CJRS scheme ends and will run until the end of April 2021.

JSS OPEN

Grants under JSS Open will be available to support the wages of employees working part time who were on the payroll on 23 September 2020 and subject to an RTI submission on or before that date.

The original proposal was that they would need to work at least 33% of their usual hours to be eligible but this has now been reduced to 20%.

For the hours not worked the employee must be paid 2/3 of their normal pay with the employer being responsible for 5% (previously 1/3) of this amount with the government providing a grant for the remaining 61.67%.

The employer will be responsible for national insurance costs and pension costs on the full amount paid to the employee.

The maximum government contribution will be £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.

JSS CLOSED


Grants under JSS Closed will be available to support the wages of employees of businesses required to close who like JSS Open are on the payroll on 23 September 2020.

Claims can be made for employees who cannot work as a result of the Tier 3 or similar restrictions. Employers must be instructed to cease work for at least 7 days to qualify. Employers must agree the new scheme with the relevant staff and make changes to their contract of employment.

JSS CLOSED GRANT IS 2/3RDS OF “NORMAL PAY”


Where employees are paid at least 2/3rds of their normal pay for hours not worked the Government will pay a grant of 2/3ds of their normal pay subject to a maximum of £2,083.33 a month. The employer will be responsible for paying national insurance and pension costs in respect of the employee.

When the business premises reopen employers will be able to claim the JSS Open grant towards the employee’s wages for hours not worked provided the employee works at least 20% of their usual hours.

The employee cannot be made redundant or put on notice of redundancy during the period during which the employer is claiming the grant.

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