On the 22nd October 2020 the chancellor announced changes to the Job Support Scheme (JSS) which is replacing the furlough scheme in November 2020.
The changes mean that employers will pay less and employees can work fewer hours to qualify for the scheme.
Job Support Scheme (JSS)
When the JSS was originally announced, which starts on 1st November 2020, the scheme required employers to pay one third of their employee’s wages for any hours not worked, plus the minimum hours of 33% for hours worked.
The changes announced to the scheme reduces the employer contribution to those hours unworked to 5% and the minimum hours required to work to 20%.
These changes mean that employees who work just one day a week will now be eligible for the scheme.
This could have a huge impact on businesses and enable more employees to be kept in work.
The government will now fund 62% of the wages for hours not worked.
If an employee was being paid £587 for their unworked hours, the government would be contributing £543 and the employer £53 (£44 of this would be direct to the employee and £19 on pensions).
The scheme, as before, will be open to all small and medium businesses, larger business will have to show an impact on revenue to qualify.
Employers will still be able to claim the £1000 Job Retention Bonus in February 2021, providing they meet the criteria.
No changes have been made to the scheme for businesses who are legally required to close.
The chancellor has announced additional funding for those businesses in the hospitality, accommodation and leisure sector, with cash grants of up to £2,100 per month, for those in high-alert level areas.
These grants will be available retrospectively for areas subjected to restrictions and for local authorities moving into tier 3.
These changes across the country will be worth more than £1 billion.
The grants are as follows:
- Providing additional funding to allow local authorities to support businesses in high-alert level areas which are not legally closed, but are impacted by the restrictions in place;
- The funding will be the equivalent of:
- £934 per month for properties with a ratable value of £15,000 or less;
- £1,400 per month for properties with a ratable value of £15,000-£51,000;
- £2,100 per month for properties with a ratable value of £51,000.
- This is equivalent to 70% of the grants amounts given to legally closed businesses.
- Local authorities will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by local restrictions.
- It will be up to local authorities to determine which businesses are eligible.
- Businesses in very high alert level areas will qualify for greater support whether closed or open.
The changes see the amounts of profit for the self-employed grants increase from 20% to 40%, which means the maximum grant will increase from £1,875 to £3,750.
Grants will be paid in two lump sum installments each covering 3-month period from November 2020 until the end of January 2021.
- The government will pay a taxable grant which is calculated based on 40% of three months’ average trading profits, paid out in a single instalment which is capped at £3,750.
- The second grant will cover a three-month period from the start of February until the end of April 2021. The government will review the level of the second grant and set this at a later date.
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