UK Covid-19: new Job Support Scheme announced

On 24 September the Chancellor announced the creation of a new Job Support Scheme (JSS) to replace the Coronavirus Job Retention Scheme (CJRS) which ends on 31 October 2020. The JSS will be available for 6 months from 1 November 2020 and will be in addition to the Job Retention Bonus scheme. The purpose of the JSS is to avoid the redundancy of employees working reduced hours in "viable jobs" and it will therefore be conditional on employees working at least one third of their usual hours.  Guidance setting out the detail is yet to be published; key terms summarised in the Treasury's Factsheet include:

• all small and medium sized enterprises will be eligible;  larger employers will need to meet a financial assessment test demonstrating that their turnover has been reduced by the pandemic (and will be expected not to make capital distributions such as dividend payments or share buybacks while accessing the grant - it is unclear as yet whether this will be a condition of eligibility);
• the scheme can be used for employees who have not been furloughed provided they have been included in  a RTI submission made on or before 23 September 2020;
• the scheme cannot be used to cover wages for employees under notice of redundancy (unlike the CJRS);
• employees must work at least 33% of their usual hours (and this minimum may be increased after 3 months), but can cycle on and off the scheme and work varying shift patterns, provided each short-time arrangement is for a minimum of 7 days;
• changes to the employment contract must be agreed and confirmed to the employee in writing;
• the employer must continue to pay usual wages for the hours worked, plus one third of usual wages for the hours unworked, and must also continue to pay pension contributions and Class 1 employer NICs (the Factsheet does not specify on what proportion of usual wages);
• the Government will pay for one third of usual wages for the hours unworked subject to a cap of £697.92 a month (which the employer must pay and then claim reimbursement for);  the Government does not expect employers to be able to top up their employees' wages further (and it is not clear whether this will be a condition of eligibility).

The scheme means that employers will have to pay at least 55% usual wages (where the employee is only working 33% usual hours), with the employee receiving at least 78% (assuming the monthly cap on the Government contribution does not apply).  The Factsheet demonstrates how the employer's percentage increases to 67% where the employee is working 50% usual hours, and 80% where the employee works 70% of usual hours.