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New Job Support Scheme replaces furlough

24th September 2020

Further details have been published about the new Job Support Scheme (JSS) that replaces the more generous furlough scheme from the 1 November 2020. This was announced in the Winter Economy Plan by the Chancellor.

UPDATE 22 October 2020

On 22 October the Chancellor announced changes to JSS to reduce employer contributions to unworked hours (see below) to just 5%, and reduce the minimum hours requirements to 20%, so those working just one day a week will be eligible.

The JSS will run for six months, although it could be extended if required.

Viable jobs

Apparently modelled on what Germany has introduced, the JSS is designed to help protect viable jobs in firms who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce.

It is not clear how a "viable job" will be defined. The Times reports that the Chancellor told a press conference that it was impossible for him “to predict given the uncertainty of the exact shape of the labour market.” He added: “It’s not for me to sit here and make pronouncements upon exactly what job is viable or not, but what we do need to do is evolve our support now that we’re through the acute phase of the crisis”.

It is also unclear what support (if any) will be available where a job is not seen as viable, maybe because of ongoing government lockdown restrictions - such as for parts of the entertainment industry.

When the current furlough scheme ends on 31 October, people not brought back by their employers will lose their jobs. Perhaps the government may yet come forward with further, targeted help for those affected sectors?

The new scheme is meant to incentivise employers to retain their staff on at least a part-time basis.

Hours not worked

Under the new scheme, where jobs are deemed viable, employers can continue to pay their employees for time worked, but the burden of hours not worked will be split between the employer and the government (through wage support) and the employee (through a wage reduction); and the employee will keep their job.

The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.

Employers using the JSS will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.

The scheme will open on 1 November 2020 and run for 6 months, until April 2021.

Further guidance will be published shortly.



As with the furlough scheme, all employers with a UK bank account and UK PAYE schemes can claim the grant. However, neither the employer nor the employee needs to have previously used the furlough scheme.

Large businesses will have to meet a financial assessment test, so the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19.

There will be no financial assessment test for small and medium enterprises (SMEs) with less than 250 employees.

The government expects large employers using the JSS to not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant. Further details will be set out in guidance.


Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.

For the first three months of the scheme the employee must work at least 33% of their usual hours. After 3 months, the Government will consider whether to increase this minimum hours threshold.

Employees will be able to come on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.

What will the grant cover?

For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee. The Government contribution will be capped at £697.92 a month.

Grant payments will be made in arrears, reimbursing the employer for the Government’s contribution.

The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.

“Usual wages” calculations will follow a similar methodology as for the furlough scheme. Full details will be set out in guidance shortly.

Employees who have previously been furloughed, will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough. 

Employers must pay employees their contracted wages for hours worked, and the Government and employer contributions for hours not worked.

The Government's expectation is that employers cannot top up their employees’ wages above the two-thirds contribution to hours not worked at their own expense.

Reduced hours

  • The employee must be working at least 33% of their usual hours.
  • For the time worked, employees must be paid their normal contracted wage.
  • For time not worked, the employee will be paid up to two-thirds of their usual wage.
  • Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.

Claiming the grant

  • The scheme will be open from 1 November 2020 to the end of April 2021.
  • Employers will be able to make a claim online through from December 2020. They will be paid on a monthly basis.
  • Grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.

HMRC audits

As with the furlough scheme, HMRC will check claims.

Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred.

Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.

Employees will be informed by HMRC directly of full details of the claim.

This approach is likely to lead to some difficult negotiations between employers and employees. Employers could just ask workers to accept fewer hours, but not use the JSS. 

The other possibility is that employers retain people on the payroll until 31 January in order to qualify for the Job Retention Bonus of £1,000 per employee, and then let them go.

Clearly, the detailed scheme guidelines will be closely read once they are published.


Beth normally works 5 days a week and earns £350 a week. Her company is suffering reduced sales due to coronavirus. Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).

Her employer pays Beth £140 for the days she works.

And for the time she is not working (3 days or 60%, worth £210), she will also earn 2/3, or £140, bringing her total earnings to £280, 80% of her normal wage.

The Government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of her normal wages) to Beth’s employer to support them in keeping Beth’s job.

Hours Employee Worked 33% 40% 50% 60% 70%
Hours Employee Not Working 67% 60% 50% 40% 30%
Employee Earnings (% of normal) 78% 80% 83% 87% 90%
Gov’t Grant (% of normal wages) 22% 20% 17% 13% 10%
Employer Cost (% normal wages) 55% 60% 67% 73% 80%

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