29th September 2020

What does the new Job Support Scheme mean for payroll?

Kirsty Fowler, Managing Director for HR & Payroll at Civica, has been working through the details of the JSS revealed so far.

Last week the Chancellor of the Exchequer, Rishi Sunak, presented the Winter Economy Plan to Parliament. This outlined how the Government will support jobs and the economy over the coming months. The Job Retention or "Furlough" Scheme is being replaced by the Job Support Scheme (JSS). The aim is protect jobs affected by COVID-19 restrictions and lockdowns throughout the winter period.

So what does this mean to users of Civica Payroll software? The payroll profession are key workers who have done so much already. We're keen to support them much as we can.

The Government will reimburse employers monthly in arrears for their contribution. As per the current Job Retention Scheme. This means that employee wages, plus any support payments, will need to go through the payroll as usual. You will then need to reclaim the grant online using the Government portal.

To help we have produced a free JSS report. This provides quick access to the information you need to make a claim and shows the values HMRC need to pay. We are also extending the opportunity to register for our emergency payroll service, which we hope offers a reassuring back-up plan in the event of difficulties. For more tips on preparing for the unexpected please read our guide to building a flexible and resilient payroll function.

We understand that the Government will review the JSS after the first three months. We will continue to track this and support you wherever possible.

What is the Job Support Scheme?

  • The JSS will replace the existing Job Retention Scheme when it ends on 31st October 2020. There are fears that the end of support will trigger a sharp increase in the number of redundancies
  • The scheme commences on the 1st November 2020 and is due to run for 6 months until the end of April 2021
  • The scheme allows employees to work fewer hours than contracted and provides a salary top up to protect incomes. This will reduce the need for organisations to make mass redundancies
  • It is open to all organisations but focuses on SMEs. Larger organisations will have to evidence that COVID-19 has impacted their turnover.

How will the Job Support Scheme work?

  • Employees using the scheme must work at least one third of their usual working hours. This will be paid as usual by their employer
  • For every hour not worked the Government will then pay one third of the employee's usual rate. This means that employees using the scheme will receive at least 77% of their pay
  • The Government contribution is capped at £697.92 per month
  • The support payments are employment income. They will be subject to National Insurance, pension contributions and tax
  • The scheme is open to all employees who have been present on an RTI submission on or before 23rd September 2020. They do not need to have been claiming under the current Job Retention Scheme
  • Employers will be able to use the JSS and claim the Job Retention Bonus for the same employee
  • Employers can't make employees redundant while they are claiming the grant for them
  • HMRC will tell employees that their employer is claiming for them and give full details.

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