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Updated 02/11/20 - The Job Support Scheme (JSS): Everything you need to know as of 22/10/20

Client Support
Hannah Dumenil
23/10/2020
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*POSTPONED UNTIL FURTHER NOTICE*


The Government’s new Job Support Scheme (JSS) replaces the current Coronavirus Job Retention Scheme (CJRS) or ‘Furlough Scheme’ and starts on 1 November 2020. This new scheme is available for six months ending on 30 April 2021.

It comprise of two Job Support Schemes due to the amendment introduction of different tiers across the UK:

Scheme One: “JSS Open” - for employers facing a decrease in demand, but are not legally required to close their premises. The government pays 61.67% of unworked hours and the company paid 5% of the unworked hours, plus the hours they actually worked at their normally hourly rate. The employer still however has to pay the employers NI and employers pension.


Scheme Two: “JSS Closed”
- for employers who are legally required to close as a result of the restrictions imposed by the ‘very high’ tier. The government pays 66.66% of the employee’s salary up to a maximum of £2,083.33. The employer is not required to top up the employee’s salary but can if they wish. The employer still however has to pay the employers NI and employers pension.




Eligibility for both JSS schemes


Employers will be able to access the JSS if;

- They have enrolled for PAYE online and submitted an RTI prior to 23 September 2020.
- They have a UK, Channel Island or Isle of Man bank account.
- An employer with 250 or more employees on the RTI as at 23 September 2020 (this includes groups of companies) undertakes a Financial Impact Test demonstrating their turnover has either remained equal or fallen to show they have been affected by coronavirus.
- Some, or all, of their employees are working reduced hours – employees must still be working at least 20% of their usual hours.



Financial impact test for large employers


Large employers, defined as a legal entity with 250 or more employees as at the RTI on 23 September 2020, are required to complete a Financial Impact Test.

This test is based on the sales figure on the employer VAT return, which is due to be filed and paid between 31 August 2020 and 7 November 2020, to be compared to the same figure from the same quarter in 2019. This is the figure recorded in box 6 of their VAT return. If the turnover figure remains equal or has fallen compared to last year, the employer is eligible to claim the JSS.



JSS additional key facts


- In order to make a claim the employee HAS to work at least 20% of their usual hours – they cannot work zero hours as previously available on the CJRS.
- The employee has to be on the RTI as at 23 September 2020.
- Employers MUST provide a written agreement to staff, which must be available to view by HMRC on request and the employee must agree to the new arrangement.
- Employees do not need to have been on furlough under the CJRS to be eligible for the JSS.
- Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.
- The JSS will not cover National Insurance or pension contributions. These contributions remain payable by the employer.
- Claims can only be made in arrears, therefore a November claim cannot be made until 8th December and you therefore cannot rely on the monies coming in before making payment to staff.



JSS Open calculations


Example 1: Fixed Hours and Fixed salary employee


An employee works full time, Monday to Friday and is paid £2,500 at the end of every calendar month. The employee as at February 2020 was contracted to 37.50 hours per week, but as at August 2020 the contracted hours were reduced to 20 hours per week - however you have to use the ‘higher of’ therefore we are required to use the contract hours of 37.50 hours per week. The employee enters a JSS Open agreement to work Monday & Tuesday only (15 hours per week) which is more than 20% of their hours per week.

The usual hours is calculated the same way as the CJRS;

1. Greater of the number of hours contracted at the last pay period before 23 September 2020 (20 hours) and the number of hours contracted in February 2020 (37.50 hours) = 37.50 hours
2. Divide by the number of calendar days in the working pattern including non-working days; 37.5/7= 5.36
3. Multiply the number of days which the employee is eligible to claim for under JSS Open; 30 days in November = 30*5.36 = 160.8 rounded to 161 usual hours
4. Check that the employee has worked at least 20% of the hours, the employee worked 67.50 hours – 67.5/161 x100 = 41.92%


To work out the overall amount that must be paid for the non-working hours;

1. Start with salary £2,500
2. Divide by 30 (the number of calendar days in the pay period)
3. Multiply by 30 (period 1 – 30 November) (the number of days the working agreement in the pay period).
4. Divide by 161 (the number of usual hours for the pay period).
5. Multiply by 93.50 (the number of non-working hours).
6. Multiply by 66.67% = £967.95


This is made up of 5% employer contribution and 61.67% government contribution to claim.

To work out the government claim, take the £967.95 / 66.67% x 61.67% = £895.36

To work out the employer cost take the £967.95 / 66.67% x 5% = £72.59 plus the hours actually worked, £2,500 x 12 / 52 / 37.50 = £15.38 per hour x 67.50 hours worked - £1038.46 & £72.59

The employers total gross pay for November is £895.36 + £72.59 + £1038.46 = £2006.42




JSS Closed calculations



Example 1: Fixed Hours and Fixed salary employee


An employee works full time, Monday to Friday and is paid £2,500 at the end of every calendar month. The employee as at February 2020 was contracted to 37.50 hours per week. The workplace is closed however, therefore no hours are worked by the employee.  

To work out the amount paid to the employee;

1. Start with salary £2,500
2. Multiply by 2/3 or 66.66% = £1,666.50
3. This amount is fully funded by the government up to a maximum of £2,083.33
4. The employer has to pay for the normal employer costs such as employer NI and employer pension.
5. Employer has the discretion to pay more that the government funded 2/3 if they wish.



Our team are of course here to help if you wish to discuss any of the above in more detail. We remain committed to our clients to provide support to get you through the difficult climate we currently find ourselves in, so please do not hesitate to contact your normal Rickard Luckin contact. If you require further guidance regarding the financial impact test please get in touch with Hannah Dumenil, Head of Payroll at Rickard Luckin on [email protected]

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