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Job Support Scheme Update 22 October 2020

Big changes have just been announced by Rishi Sunak to the Job Support Scheme (JSS). The JSS is due to come into force in less than 2 weeks on 1 November 2020.

As before, the JSS will be open to all small business and larger business who can show an impact on revenues and financial difficulty. Employers are still required to establish whether they can continue to pay just over a fifth of usual employees for those individuals that they want to keep employed.

Employers are now required to pay less than what was previously suggested, and staff can work fewer hours (one day a week) than the previous indication of 33% of their normal hours to be able to qualify for the scheme.

The changes of the JSS aim to assist with some of the financial issues that businesses are experiencing - those businesses that have not been forced to close, but are experiencing lower demand due to the COVID-19 outbreak. Businesses in tier two areas had expressed views that they would be financially better off if they were placed under tier three restrictions, as they would be forced to close the business and would benefit from more government support. As a response to this, the government has now revealed these changes to the terms of the JSS.

Under the previous proposal for the JSS, there was a minimum requirement of paying 55% of wages for a third of an employees hours. However, this has now been changed and employers are required to pay a minimum of 20% of an employees normal working hours, and contribute 5% of the hours the employee has not worked.

The changes have also increased the maximum payment available. The government announcement has stated that they will fund 62% of wages for the hours not worked, which is more than double the amount of the previous maximum payment (increasing this to £1,541.75).

In particular, the government have announced extra support those impacted businesses in Tier 2 areas. Local councils will be funded to provide monthly grants of up to £2,100 to companies and this will be retrospective going back to August for those with enhanced restrictions.

There has also been a further increase of funding to self-employed individuals, under the self-employment scheme, which has been doubled from 20% to 40% of profits, with a maximum of £3,750 per month.

For more information contact Amy Stokes in our Employment & HR department via email or phone on 0333 207 1157. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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