Job Support Scheme Government contribution increased
Following the announcement of the Government on 31 October 2020, the Job Support Scheme (which was due to commence on 1 November 2020) has been postponed until the furlough scheme ends. The furlough scheme has been extended until 31 March 2021. New guidance on the JSS was published on 30 October 2020, but this was marked as withdrawn on 1 November 2020 because of the extension to the furlough scheme. This post will be updated in due course. See our separate post here for further detail on the extension of the furlough scheme.
The Government announced on 22 October changes to the short-time working Job Support Scheme (JSS). The aim is to support businesses that remain open but are experiencing considerable difficulty to keep staff by contributing to wage costs. The support offered by the Government under the JSS has been increased “in recognition of the challenging times ahead”.
Job Support Scheme – what has changed?
Under the JSS, an employee will now only need to work and be paid for at least 20% of their normal hours, not 33% as originally announced. This means that an employee working one day a week will be eligible under the scheme.
For the employee’s remaining unworked hours, the Government will provide up to 61.67% of the employee’s normal wages, with a cap of £1,541.75 a month. This is an increase from the £697.92 originally announced.
The employer will contribute the other 5% of the unworked hours, not 33% as originally announced, up to a cap of £125 a month. Employers will still pay National Insurance Contributions and automatic enrolment pension contributions in full.
The caps are based on a monthly reference salary of £3,125. The guidance explains that an employee will earn a minimum of at least 73% of their normal wages, where their usual wages to not exceed the reference salary.
The announcement gives the following example:
“A typical full-time employee in the hospitality industry is paid an average of £1,100 per month. Under the Jobs Support Scheme for open businesses, they will still take home at least £807 a month. All the employer needs to pay is a total of £283 a month or just £70 a week; the government will pay the rest”
Further examples of how to calculate reference salary and hours of work are set out in the guidance.
Originally posted 28 October 2020. Updated 13 November 2020
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