The employee ‘Job Support Scheme’ was intended to replace the Coronavirus Job Retention Scheme (CJRS). 

On 5 November 2020 the government announced an extension to the CJRS to 31 March 2021. 

It is not known if the JSS will be introduced after that.  

At a glance

At a glance

  • The employee Job Support Scheme (JSS) was due replace the Coronavirus Job Retention Scheme (CJRS).
    • The CJRS was extended in November 2020 and is due to run until 31 March 2021.

HMRC issued guidance on the JSS on 30 October 2020, this was withdrawn on 1 November 2020.

This note is based on the original guidance.

  • The JSS is a grant paid by government and is designed to supplement the payment of employee wages for those who work reduced hours or whose work has been stopped due to Coronavirus.
  • The JSS will not cover National Insurance or pension contributions.
    • Pension contributions must continue to be paid in accordance with the applicable pension scheme terms unless the employee has opted out or stopped paying into their pension.
  • Employers using the JSS will also be able to claim the Job Retention Bonus (JRB) if they meet the eligibility criteria.
  • Where a pay period includes eligible amounts under the CJRS and JSS, no amount of gross pay should be included in more than one scheme.
  • Two forms of the JSS exist: JSS Open and JSS Closed.
    • JSS Open provides support to employers facing reduced demand, giving the option of keeping employees on shorter hours.
    • JSS Closed provides support to employers who are legally required to close their premises owing to Coronavirus restrictions.

At a glance: JSS Open

  • Employees must work at least 20% of their 'usual hours'.
  • Employees should be paid as normal for the hours worked.
  • Employees will receive 66.67% of their normal pay for the hours not worked.
    • The employer will pay 5% of this, to a maximum of £125 per month (with discretion to pay more if they wish).
    • The government will pay the remainder of the 61.67% to a maximum of £1,541.75 per month.

At a glance: JSS Closed

  • This scheme applies to employees who cannot work due to their employer’s premises being legally required close as a direct result of Coronavirus restrictions.
  • Employees will receive two-thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month.
    • Employers have discretion to pay more than this if they wish.

Overview and examples

Who can claim?

  • All employers with UK bank accounts and Pay-As-You-Earn (PAYE) schemes, even if they have not used the CJRS.

What are the conditions?

  • Employees must have been on the employer’s PAYE payroll at some point between 6 April 2019 and 23 September 2020 and Real-Time Information (RTI) submissions notifying payments to that employee must have been made on or before 23 September 2020.
  • Employees must not have been made redundant or be serving a contractual or statutory notice period during the claim period.
  • Employers must have paid the full amount claimed for an employee’s wages to the employee before each claim is made.
  • Employers cannot enter into any commitment or transaction with the employee which would reduce wages below the amount claimed (for example a Salary sacrifice scheme).
    • Where an employee had authorised their employer to make deductions from their net salary, these deductions can continue while the employee is working reduced hours provided that these deductions are not administration charges, fees or other costs in connection with the employment (for example, Pension contributions and charitable giving).
  • Organisations that have staff costs that are fully publicly funded (even if they are not in the public sector), should use that money to continue paying their staff, and not use the JSS.
  • Organisations can use the scheme if they are not fully funded by public grants, for the proportion of their revenue disrupted due to Coronavirus.

Other points:

  • Employees can be on any type of contract including zero-hours and temporary contracts.
  • Agency workers are regarded as employees of an employment agency for the purposes of this scheme provided they are employees for Income Tax purposes.
  • Employees do not need to have been furloughed under the CJRS to be eligible for the JSS.
  • Employees may undertake training voluntarily in non-working hours.
  • HMRC expects that employers with 250 or more employees will not make capital distributions while claiming the JSS grant. This includes dividend payments and Share buybacks whilst they are using the scheme.

Additional conditions: JSS Open

  • Some, or all, employees must be working reduced hours. Employees must still be working for at least 20% of their usual hours.
  • Employees must be paid at least minimum wage rates (under the National Living Wage, National Minimum Wage or Apprentices Minimum Wage rules as relevant) for all hours worked or treated as worked.
  • Employers must have reached a written agreement with the employee that they have been offered a temporary working agreement which covers at least seven consecutive days.
    • This written agreement and records relating to its terms must be retained for five years and available for HMRC to view on request.
    • Records must be kept of how many hours employees work and the number of usual hours they are not working.
    • Employers must make sure that the agreement is consistent with employment, equality and discrimination laws.
  • Employers with 250 or more employees as at 23 September 2020 must undertake a Financial Impact Test (FIT) to show they have been adversely affected due to Coronavirus.
    • The FIT broadly involves comparing box 6 of the employer’s VAT return due to be filed and paid between 31 August 2020 and 7 November 2020 with the same period in 2019.
    • Employers who submit monthly VAT returns should compare the three consecutive months which are due to be filed and paid by 7 November 2020 with the same period in 2019.
    • Employers who a part of a VAT group will use the group’s turnover figures for this calculation.
    • It is necessary to demonstrate that the employer’s turnover has remained equal to or decreased on the previous year.
    • Charities with 250 or more employees that are registered with a UK charity regulator or are exempt from such registration will not be required to carry out a FIT and are eligible for the JSS.

Additional conditions: JSS Closed

  • The employer’s business premises at one or more locations must have been legally required to close as a direct result of Coronavirus restrictions set by one 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.
  • A claim may only be made in respect of employees whose primary workplace is at the premises that have been legally required to close.
  • The employer must have instructed that the relevant employee cease work for a minimum period of at least seven consecutive calendar days.
    • Claims can only be made for periods during which the relevant Coronavirus restrictions are in place. Employers will not be able to claim JSS Closed to cover periods after restrictions have lifted and the business premises are legally allowed to reopen.
  • Business premises required to close by local public health authorities as a result of specific workplace outbreaks are not eligible for this scheme.
  • Employers must have reached a written agreement with the employee that they have been instructed to and agree to stop working for a minimum of seven consecutive days.
    • Employees must be notified of the agreement in writing. 
    • Records relating to the terms of these arrangements must be retained for five years and available for HMRC to view on request.
    • Employers must make sure that the agreement is consistent with employment, equality and discrimination laws.

This is not a complete list of employee eligibility requirements for JSS Closed and further guidance will be published by the end of October.

Calculating JSS Open: general points

  • Employers cannot claim for employees’ wages for any time they spend working.
  • Claims should commence from the later of the date that the employee starts working reduced hours or the date when working reduced hours is confirmed in writing, not when the decision is made.
  • Claim periods can start from 1 November 2020 onwards.
  • Claims are subject to a maximum ‘reference salary’ of £3,125 per calendar month.
  • An employee’s ‘reference salary’ is made up of the regular payments their employer is obliged to make, including:
    • Regular wages
    • Non-discretionary payments for hours worked, including overtime
    • Non-discretionary fees
    • Non-discretionary commission payments
    • Piece rate payments
  • Calculations for an employee’s ‘reference salary’ cannot include payments made at the discretion of the employer where the employer was under no contractual obligation to pay, including:
    • Tips
    • Discretionary bonuses
    • Discretionary commission payments
    • Non-cash payments
    • Non-monetary Benefits in kind and salary sacrifice schemes that reduce an employee’s taxable pay.
  • For employees who are paid a fixed salary, the ‘reference salary’ is the greater of:
    • The wages payable to the employee in the last pay period ending on or before 23 September 2020, and
    • The wages payable to the employee in the last pay period ending on or before 19 March 2020 (this may be the same salary calculated under the CJRS).
  • For employees whose pay is variable, the ‘reference salary’ is the greater of:
    • The wages earned in the same calendar period in the tax year 2019- 20,
    • The average wages payable in the tax year 2019-20, and
    • The average wages payable from 1 February 2020 (or the employee’s start date if later) until 23 September 2020.

Calculating JSS Open: employees with fixed hours

  • Where employees are contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, ‘usual hours’ are calculated based upon the greater of:
    • The hours that the employee was contracted for at the end of the last full pay period ending on or before 23 September 2020, and
    • The hours that the employee was contracted for at the end of the last full pay period ending on or before 19 March 2020 (this may be the same number of hours calculated under the CJRS).
    • If employees moved to part-time working, this may be varied. HMRC are yet to provide further guidance.
    • This should include hours paid as annual leave and statutory leave. 

HMRC advise that full details of sample calculations will be available in guidance published at the end of October 2020. At present, HMRC have provided the following indicative calculation:

An employee has worked full time, from Monday to Friday, for A Ltd since 2011, and is paid £2,250 gross at the end of every calendar month. The employee has always been contracted to work 37.5 hours per week. A Coronavirus Job Retention Scheme grant was not claimed for the employee.

A Ltd is a small employer and meets all the eligibility criteria to qualify for Job Support Scheme.

The employee enters into a JSS Open temporary working agreement with A Ltd on 2 November 2020 to work Mondays and Tuesdays (7.5 hours each day, equating to 15 hours per week) from 2 November 2020 to 31 December 2020, at which point the position will be reviewed. The employee’s pay for the working hours in November is £945.

A Ltd calculates the amount of the JSS Open grant for the pay period 1 November 2020 to 30 November 2020 (one calendar month).

The employee’s usual hours are calculated for the days on which the employee is on a JSS Open temporary working agreement within the pay period (2 November 2020 to 30 November 2020). The employee’s usual hours are calculated by A Ltd to be 155 hours:

The steps to calculate the fixed employee’s usual hours are:

  1. The greater of the number of hours contracted for at the end of the last pay period before 23 September 2020 (37.5) and the number of hours contracted for at the end of the last pay period before 19 March 2020 (37.5): 37.5
  2. Divide by the number of calendar days in the repeating working pattern, including non-working days: 7 37.5÷7=5.36
  3. Multiply by the number of days which the employee is eligible to be claimed for under JSS Open: 29 days x 5.36 = 155.44 rounded to 155 usual hours.

The employee did not take any time off in November, so the actual hours worked in November are 67.5 hours. A Ltd calculates that the employee didn’t work for 87.5 hours of their usual hours for November.

To calculate the percentage of hours worked: (67.5÷155) x 100 = 43.55%

A Ltd checks that the employee can be claimed for under Job Support Scheme. In November, the employee worked for 43.55% of their calculated 155 usual hours for November. Because the employee is working at least 20% of their calculated usual hours for November, providing other Job Support Scheme conditions are met, a claim can be made for the employee.

A Ltd calculates the employee’s Reference Salary as £2,250 for the pay period. The maximum Reference Salary that can be covered under the scheme is £3,125 per calendar month. The cap does not affect the calculation here because the Reference Salary is less than £3,125.

To work out the overall amount that A Ltd must pay the employee for their non-working hours in each pay period:

  1. Start with £2,250 (the reference salary for the pay period)
  2. Divide by 30 (the number of calendar days in the pay period)
  3. Multiply by 29 (the number of days subject to a Temporary Working Agreement in the pay period)
  4. Divide by 155 (the number of usual hours for the JSS Open days in the pay period
  5. Multiply by 87.5 (the number of non-working hours for the JSS Open days)
  6. Multiply by 66.67% = £818.59

This is made up of a 5% employer contribution, and a 61.67% government contribution which A Ltd can reclaim.

To work out the government contribution to the employee’s pay for the non-working hours:

  1. Start with £818.59 (the total pay for the non-working hours)
  2. Divide by 66.67
  3. Multiply by 61.67 = £757.20

The employee’s total gross pay for November will be £1,763.59 (£945 + £818.59).

Calculating JSS Open: employees with variable hours

  • The variable hours calculation applies if either:
    • The employee is not contracted to a fixed number of hours, or
    • The employee’s pay depends on the number of hours they work.
  • For employees whose number of hours varies and/or whose pay depends on the number of hours they work, the number of usual hours is calculated based on the higher of:
    • The number of hours worked in the same calendar period in the tax year 2019-20,
    • The average number of hours worked in the tax year 2019-20, and
    • The average number of hours worked from 1 February 2020 (or the employee’s start date if later) until 23 September 2020.
    • This should include hours paid as annual leave and statutory leave.
  • The calculation of usual hours is not and cannot be altered if the employee is expecting to work more or fewer hours than this in the future.
  • For employees who are part of a flexible work time arrangement, employers should:
    • Not count as hours worked any hours that the employee worked but was not paid for because they accrued paid time off which they could take later.
    • Count as hours worked any hours that the employee took as paid time off (‘flexi-leave’), which they had accrued by working additional hours at some other time. 
  • For employees who are paid per task or per piece of work done whose hours cannot be calculated in this way, hours can be estimated based on the number of ‘pieces’ produced and the average rate of work per hour, as per National Minimum Wage rules.

HMRC advise that full details of sample calculations will be available in guidance published at the end of October 2020. At present, HMRC have provided the following indicative calculation: 

An employee has worked between 30 and 35 hours for B Ltd since they started their employment in January 2019. They earn £14.60 per hour and are paid every week.

B Ltd is a small employer and meets all the eligibility criteria to qualify for Job Support Scheme.

The employee enters into a JSS Open temporary working agreement on 12 November 2020 which takes effect from 12 November 2020 until 31 December 2020 when the position will be reviewed. B Ltd will continue to pay the employee £14.60 for each hour worked during this time.

The employee must work for at least 20% of their usual hours during the claim period. B Ltd calculates that the employee has worked for 42 hours between 12 November and 30 November and the number of usual hours is 90.

This is 46.7%, which is at least 20%, so (providing the other conditions are met) a claim can be made for this employee.

B Ltd calculates the amount of the JSS Open grant for the pay period 16 November 2020 to 22 November 2020 (7 eligible JSS Open days).

B Ltd calculates the number of usual hours based on the higher of:

  • The number of hours worked in the same calendar period in the tax year 2019 to 2020,
  • The average number of hours worked in the tax year 2019 to 2020, and
  • The average number of hours worked from 1 February 2020 (or the employee’s start date if later) until 23 September 2020.

B Ltd calculates the usual hours for this pay period as 33 hours.

The employee did not take any time off in the pay period, and B Ltd identifies the employee’s actual hours worked in the pay period to be 15 hours.

B Ltd calculates that the employee didn’t work for 18 hours of their calculated usual hours for the pay period.

B Ltd finds the higher of:

  • The pay the employee earned in the period 16 November to 22 November 2019,
  • The average wages payable in the tax year 2019 to 2020, and
  • The average wages payable from 1 February 2020 to 23 September 2020.

B Ltd calculates the employee’s Reference Salary at £478.50 for the pay period. The cap does not affect the calculation because the Reference Salary is less than the weekly cap of £721.15.

To work out the overall amount that B Ltd must pay the employee for their non-working hours in each pay period:

  1. Start with £478.50 (the reference salary for the pay period)
  2. Divide by 7 (the number of calendar days in the pay period)
  3. Multiply by 7 (the number of days subject to a Temporary Working Agreement in the pay period)
  4. Divide by 33 (the number of usual hours for the JSS Open days in the pay period)
  5. Multiply by 18 (the number of non-working hours for the JSS Open days)
  6. Multiply by 66.67% = £174.01

This is made up of a 5% employer contribution, and a 61.67% government contribution which A Ltd can reclaim.

To work out the government contribution to the employee’s pay for the non-working hours:

  1. Start with £174.01 (the total pay for the non-working hours)
  2. Divide by 66.67
  3. Multiply by 61.67 = £160.96

This employee’s total gross pay for this period is £393.01 i.e. £219.00 + £174.01.

How to claim

  • Employers will be able to make a claim from 8 December 2020 online through gov.uk, covering pay periods ending and paid in November.
    • Subsequent months will follow a similar pattern, with the final claims for April 2021 being made in early May 2021.
  • Agents who are authorised to do PAYE online for employers will be able to make a claim on their behalf.
  • Further guidance will be published by the end of October 2020.

Fraudulent claims

  • HMRC will check claims and payments may be withheld if HMRC suspects a claim to be ineligible.
  • Any overpayments must be paid back to HMRC where claims contain incorrect information.
  • The full amount of any grant must be repaid if a claim is found to be fraudulent.
    • Penalties of up to 100% of the amount overclaimed may be applied.
  • HMRC will consider publishing the details of employers who are charged a penalty because of a deliberately incorrect claim.
  • HMRC intend to publish the names of employers who have used the scheme.
  • Employees will be able to check if their employer has made a claim relating to them via their Personal Tax Account.

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