Coronavirus: Rishi Sunak reveals extension to the Job Support Scheme

On 9th October 2020, Chancellor Rishi Sunak unveiled an extension to the Job Support Scheme aimed at businesses that are forced to close as a result of rising COVID-19 infection rates.

The extension to the Job Support Scheme is intended to support employees of businesses which are faced with new lockdown restrictions from week commencing 12th October, as part of the government’s new three-tier lockdown system to help stop the spread of COVID-19 and subsequent overwhelming of hospitals.

How will the scheme work?

Full detailed terms and conditions of the new expansion to the Job Support Scheme are still to be released by government; however, what has been confirmed is that the government will pay up to 67% of salary, capped at a maximum of £2,100 per month, for employees who are unable to work for a minimum of 7 days because their employer has been told to temporarily close their business.

The expansion to the Job Support Scheme will start from 1st November 2020 and will be expected to run for a period of 6 months alongside the standard Job Support Scheme. However, this may be extended by the government as the scheme is reviewed in accordance with COVID-19 infection rates.

How do businesses make a claim?

Full detailed terms and conditions of the expansion to the Job Support Scheme are still to be released by government, including how claims will be submitted for this payment.

Will employees have to agree to be placed on this scheme?

Full detailed terms and conditions of the expansion to the Job Support Scheme are still to be released by government, including how claims will be submitted for this payment.

What if the business is closed for less than 7 days?

At present, the details of the scheme say that the employee has to be unable to work for a minimum of 7 days because their employer’s business has been instructed to close by government or their local authority.

It is unclear at this time whether this means 7 working days or 7 calendar days.

We can assume from the information released at present that any business closed for less than 7 days will not be eligible to claim for the scheme. However, further clarification on this is still to come from government.

What if my employee is part-time?

At present, the details of the scheme say that the employee has to be off work for a minimum of 7 days; however, the limited details released regarding the scheme are not clear if this has to be 7 working days or 7 calendar days.

We anticipate this question will be answered when the full terms and conditions of the expansion of the Job Support Scheme are released by government.

Does this affect sick payments for anyone who is absent or self-isolating?

We anticipate the terms of the expansion to the Job Support Scheme will be similar to those of the Coronavirus Job Retention Scheme, otherwise known as Furlough, whereby employees who were sick or self-isolating received their normal sick payments and returned to furlough pay at the time their sickness or self-isolation ended.

At present, we anticipate this question will be answered when the full terms and conditions of the expansion to the Job Support Scheme are released by government.

How does this differ from the original national furlough scheme and the new Job Support Scheme?

The Coronavirus Job Retention Scheme, also known as furlough, is in place until 31st October 2020 for all those who were registered under the scheme before 10th June 2020 deadline. Under this scheme, the government pays 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. In addition, the employer also pays the ER class 1 NICs and pension contributions and tops up employees’ wages to ensure they receive 80% of their usual wages up to a maximum cap of £2,500, for the time they are furloughed.

The standard Job Support Scheme also comes into effect on 1st November 2020 and is applicable to anyone who was registered on their employer’s PAYE on or before 23rd September 2020. The employee will work 33% of their usual hours, and for the rest of their usual hours they did not work, the employee will be paid up to two-thirds of their usual wage in a contribution from their employer and the Government. The Government contribution will be capped at £697.92 a month. This scheme is intended to give employees an opportunity to earn a minimum of 77% of their normal wages where the Government contribution has not reached its cap.

Employers using the Job Support Scheme and its new expansion will also be able to claim the Job Retention Bonus providing they meet the eligibility criteria.

When will the scheme end?

The expansion to the Job Support Scheme is expected to run for 6 months from 1st November 2020.

It is expected to only be used by businesses which are closed for a minimum of 7 days at the instruction of government or their local authority as part of the three-tier lockdown system measures anticipated to come into place on 12th October 2020.

Businesses that have not been instructed to close as part of the three-tier lockdown system, or which have chosen to close without having been instructed to by the government or their local authority, will not be able to utilise the expansion to the Job Support Scheme.

Businesses which remain open as normal can continue with current furlough arrangements under the Coronavirus Job Retention Scheme for anyone already registered on the scheme until its closure on 31st October 2020. From 1st November 2020, the Job Support Scheme will also be opened to all businesses who are open, where their employees meet the eligibility criteria.

What is the anticipated three-tier system?

Expected to be put in to place from Monday 12th October, the three-tier system is anticipated to divide England into a traffic light system of three tiers.

• Tier 1 / Green – Expected to include the same current national restrictions within England at present which include the 'rule of six' and 10pm pub curfews.

• Tier 2 / Amber – Expected to include all the restrictions of Tier 1, but with an additional ban on people from different households mixing indoors.

• Tier 3 / Red – Expected to include all the restrictions of Tier 1 & Tier 2, but with an additional ban to prevent all social contact with anyone outside a person’s household in any setting. Tier 3 is likely to be areas where businesses are told to close temporarily, and as such the regions placed on tier 3 are the regions likely to benefit from the expansion to the Job Support Scheme.

Each tier is expected to be given a variation in rules and restrictions, with each region of England anticipated to be placed under the relevant tier in response to the number of confirmed COVID-19 cases reported in that area.

As the reported number of confirmed COVID cases changes over time by region, each region may be moved between tiers in response to changing levels of infection rates.

It is not yet known whether or not the anticipated tier 3 ban on households mixing in any setting will include an exception for support bubbles.

Full details of the tier-system are expected to be released next week by formal government announcement.