DMS Posts

Coronavirus Job Support Scheme – FAQs for employers

The government’s new Job Support Scheme replaces the furlough scheme and starts on 1 November 2020. An extension to the Job Support Scheme has been announced aimed at supporting businesses required to close as a result of coronavirus restrictions. These FAQs cover eligibility, how the Job Support Scheme works, what you need to agree with employees, alternative resourcing options for employers and what we know so far on the extension to the scheme.

The Job Support Scheme (JSS) will provide ongoing wage support for people in work, provided that the employer meets certain access conditions, the employee is working at least 33% of their usual hours, and the employer also provides additional wage support. It will start on 1 November and continue until the end of April 2021. The furlough scheme will come to an end on 31 October 2020 as planned.

The latest position regarding the JSS is as follows:

  • The government published a Winter Economy Plan on 24 September which provided a brief outline of the scheme and a factsheet that explained its key components.
  • On 9 October, the Chancellor announced an extension to the JSS aimed at supporting businesses who are legally required to close their premises as part of local or national restrictions. The extension will sit alongside the original JSS and the Job Retention Bonus. A separate short factsheet has been published explaining how the expansion of the JSS scheme will work.
  • Further details are expected shortly when the government publishes full guidance on the JSS. (We will update these FAQs following that.)

Eligibility for the JSS explained

Is the scheme only open to employers in defined sectors?

No, the JSS is not limited to any sectors or settings. It is open to all employers with eligible employees, a UK bank account and a UK PAYE scheme.

Importantly, the general JSS will only be available to larger employers if they meet a financial assessment test. (SMEs will not have to meet any financial test.)

The expanded JSS (for closed businesses) seems to apply to all employers, without any financial assessment test.

Do we need to prove that our trading conditions have been impacted?

Not if you are an SME or if you are required to close your premises. If you are a large employer, however, claiming under the general JSS you will need to demonstrate that your turnover is lower as a result of the Covid-19 pandemic.

There are currently no further details of the financial assessment test, and we don’t know the timeframe for assessing lower turnover.

What if some parts of our business have been impacted but not others?

If you are an SME, you won’t need to pass any financial impact test and you can access the JSS even if the pandemic has only had an impact on a small part of your business. Similarly, if you are required to close your premises then it seems that you will be able to apply under the extended JSS without passing any financial impact test.

If you are a larger business claiming under the general JSS, you’ll need to pass a financial impact test. The details of this have not yet been released. We do not yet know if group companies will be assessed as a group on a consolidated basis.

What’s the definition of an SME for these purposes?

This has not been announced yet. If it is based on the definition in the Companies Act 2006, it will mean (broadly) that a company would be defined as an SME if it meets at least two of the following requirements:

  • annual turnover of £36 million or below
  • balance sheet total of £18 million or below
  • 250 or fewer employees

However, we do not know yet if this definition will be adopted, or if group companies will be looked at individually or assessed as a group. This will presumably be addressed in the forthcoming guidance.

Which employees can we put on the scheme?

To be eligible for the JSS, employees must have been on your 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.

Under the general JSS, the employee must work at least 33% of their usual hours. The government’s factsheet says that the minimum hours threshold might be increased in February 2021.

Under the JSS extension for closed businesses, the employee must have stopped work altogether (see below).

Does the employee need to have been furloughed to be put on the JSS?

No. The JSS is open to employers even if they have not previously used the furlough scheme and employees do not necessarily have to have been furloughed in order to be put into the JSS. This is the case for both the general JSS and the JSS expansion for closed business premises.

This means that, unlike the furlough scheme, the JSS is open to employees who have continued to work throughout the pandemic but on reduced hours. (The furlough scheme has allowed for part-time work since 1 July 2020 but is only available to employees who were fully furloughed with no work at all for at least three weeks before 1 July.) Unlike the furlough scheme, the JSS is also open to employees who started work after March 2020 (although they need to have been on your payroll by 23 September 2020 – see above).

What if there’s just no work at all for some employees but we are not legally required to close?

The minimum hours requirement is a key component of the general JSS. If you don’t have enough workto provide even a third of an employee’s usual hours, you will not be able to put them into the scheme.

This has led to criticism of the scheme from industries such as live entertainment and sport, where jobs may be perfectly viable in the long run but in the short term due to Covid restrictions there is simply no work. Other possible resourcing arrangements are covered below.

We have some work but we don’t think we can guarantee 33% of usual hours every week – can we still use the JSS?

It is currently unclear if employees must be working at least 33% of their hours every week or if this is an average over a month or longer period. However, the factsheet says that employees will be able to cycle on and off the scheme and do not need to be working the same pattern each month – although each short-time working arrangement must cover a minimum period of seven days. This suggests that you may be able to move employees out of the JSS for periods in which they are not working 33% of their usual hours (although you would need to agree with your employees what will happen in those periods). We await further guidance.

If we put employees into the scheme, do we need to promise that we won’t make them redundant for six months?

No, it does not appear that there will be any ban on making redundancies for the whole six months of the scheme. The factsheet says that 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”. This suggests that you would be able to move an employee out of the JSS and stop claiming the grant for them if you needed to make them redundant before the scheme closed. (See below under “How the JSS works in practice” for further discussion of what this may mean in practical terms.)

Can we claim the £1,000 job retention bonus while also claiming under the JSS?

Yes.You can claim your £1,000 bonus for bringing a furloughed employee back to work in addition to claiming ongoing support for that employee under the JSS. To qualify for the bonus, the employee would need to remain continuously employed through to the end of January 2021 and earn an average of £520 per month over that period.

Is it true that we can’t pay dividends to shareholders while claiming under the JSS?

The details released so far state that the government “expects” that large employers will not make capital distributions (such as dividends) while using the scheme. It is not clear if this is going to be converted into a legal requirement.

What about Covid-vulnerable employees who say it’s not safe for them to come back to the workplace?

It is not clear how many employees there are who are currently on full furlough who feel unable to return because they are Covid-vulnerable or someone they live with is Covid-vulnerable. It seems that the 33% minimum hours requirement is a must, which will be an issue for these employees if they cannot work from home. This may generate disputes about whether it is safe for those employees to come back to work, but many may feel they have little choice.

Employers should make sure that the workplace is Covid-secure and they have carried out a thorough risk assessment that addresses the risks to such employees. If you have taken all reasonably practicable steps to reduce the risk to an acceptable level and the employee is still unwilling to return, you could consider a period of unpaid leave as an alternative to the JSS, or redundancy. Potentially, you could take the view that this is not a redundancy situation but rather a failure by the employee to obey reasonable instructions, although there may be some risks with taking that approach depending upon the employee’s circumstances. 

How the JSS works in practice

Who pays what under the scheme?

The idea is that employees working at least 33% of their usual hours can have their pay topped up.

The unworked time is essentially split into three. The employer pays for a third of the unworked time, the government also pays for a third of the unworked time (up to a cap) and the final third is unpaid (although it is not clear if the employer can offer extra top-ups – see below).

This means that an employee working the minimum 33% of their normal hours would receive 77% of their usual pay. Out of this 77%, 33% would be pay for hours actually worked, 22% would be employer top-up and 22% would be government top-up.

For details of how the JSS expansion (for closed businesses) works, see below.

The government contribution is capped at a maximum of £697.92 per month. It is not clear if the cap will be reduced if the employee is working more than 33% of their normal hours.

The cap will impact employees who usually earn more than about £38,000 per year. For example, an employee who usually earns £45,000 and is only working a third of their usual hours will only receive £697.92 in government top-up even though this represents less than one third of their unworked hours.

The government contribution is considerably less than it was under the furlough scheme when it first opened, when the government supported 80% of an employee’s wage costs up to a maximum of £2,500 each month.

What about National Insurance Contributions and employer pension contributions?

The factsheet says that the grant will not cover Class 1 Employer NICS or pension contributions, although these contributions will remain payable by the employer.

It seems most likely that employer will need to pay these contributions in respect of both the government top-up and the employer top-up, as well as in respect of pay for hours actually worked, but we await further guidance.

Does the top-up mean that we are paying extra for reduced work?

Yes. The government factsheet gives the example of Beth, who normally works five days a week and earns £350 a week. The company puts Beth on the JSS working two days a week (40% of her usual hours). The employer pays £140 for the days she works. The employer would also then pay an additional £70 for the days she doesn’t work. Beth’s two days therefore cost the employer £210, which is 50% more than they would normally cost. We assume there will also be pension and national insurance payments on top of this – see above.

If the employer had three employees doing the same role as Beth, it would be cheaper (in terms of wage costs) to retain one of them full-time and make the other two redundant – as opposed to having all three employees working for a third of their usual hours.

The idea behind the JSS, however, is that it is a way to keep jobs going and to retain valuable skills and people over the next six months – in the hope that employees will be able to return to more normal hours by the time the scheme closes. Employers will no doubt be weighing the costs of retaining employees against the costs of making redundancies and then potentially having to re-hire and train new employees in the future.

We can’t afford the top-up – what are the options?

The employer top-up is a key component of the scheme, so if you will not be able to afford this you will need to look at other options – for example, agreeing a reduced working week without the extra financial support, or redundancies. We look at alternative options in more detail below.

Can we offer extra top-ups?

This is not clear at present. The factsheet for the general JSS seems to imply that employees can only be put into the scheme if they agree to take a wage reduction, and 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. It is therefore currently unclear if employers could offer an extra top-up at their discretion or if they are going to be legally barred from doing so. It would be surprising if the government introduced a legal bar on employers making extra top ups, although few employers may in practice be able to afford to do so.

The factsheet for the JSS extension (for closed business premises) says that employers will be able to offer top-ups when claiming under the extended scheme.

What does “usual pay” and “usual hours” mean?

The factsheet says that the usual pay calculations will follow a similar methodology as for the furlough scheme. Employees who have previously been furloughed will have their underlying normal pay and/or hours used to calculate usual wages, not the amount they were paid while on furlough. The detailed rules are expected to be set out in the forthcoming guidance.

Can we agree a different working pattern each week?

Yes, it appears so. The factsheet for the general JSS says that employees “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”. This suggests that you can claim for a different amount of unworked hours each week, subject to the employee working at least 33% of their usual hours.

What if there’s a local or national lockdown and the employee can’t work at all?

Under the extension to the JSS, for businesses who are legally required to close their premises as part of local or national restrictions the government will pay 67% of employee wages, up to a maximum of £2,100 a month (employers will need to cover NICs and pension contributions). Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.

What if the employee takes holiday?

This is unclear but we would expect it to be dealt with in the guidance. For example, we don’t yet know whether holidays will “count” towards the 33% minimum working hours required under the general JSS or if they will be treated as unworked hours. Employers may need to top up holiday pay in some cases to ensure that employees are receiving the correct statutory entitlement.

What if the employee is sick or under official instruction to self-isolate?

The employee would be entitled to statutory sick pay (SSP) in these circumstances, but it is not clear how time off sick will be treated under the JSS.

Can we start redundancy consultation or put employees at risk of redundancy?

The factsheets for both he general JSS and the JSS extension (for businesses that are required to close) say that 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 under the JSS. This indicates that you will be able to start redundancy consultation and put employees at risk of redundancy while claiming for them under the JSS, provided that you do not issue notice of termination of employment due to redundancy (see below). However, we await further clarity on this point in the guidance.

Can we issue notice of redundancy or make employees redundant?

It seems that you will be able to do this, but you will need to move them out of the scheme first. The factsheet says that 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 under the JSS. This suggests that you can issue notices of redundancy or make employees redundant so long as you move them out of the scheme first. We await further guidance, but you may need to move them out of the scheme before the beginning of the pay period in which you issue notice of redundancy.

How would we calculate redundancy pay for an employee in the JSS?

This is unclear. The government recently legislated to ensure that furloughed employees have their statutory redundancy payments calculated on the basis of their pre-pandemic pay, rather than the pay they received while in the furlough scheme. It seems likely that the government will extend the new rules to cover employees in the JSS but this has not been confirmed.

How do we claim?

Employers will be able to make a claim under the JSS online from December 2020. The factsheet says that grant payments will be made monthly in arrears, reimbursing the employer for the government’s contribution. This means that a claim can only be submitted in respect of a given pay period after payment has been made and that payment has been reported to HMRC via an RTI return.

Can employees take another part-time job during the hours we don’t need them to work for us?

Furloughed employees have always been allowed to work elsewhere during their furloughed hours (subject to their contractual obligations to their main employer). It is not clear if a similar principle will apply to the JSS, but it seems likely.

In what circumstances would we have to repay the grant?

The factsheet says that HMRC will check claims, and 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 so, if you have not paid the government top-up to the employee as wages, you would also be liable to repay it.

What needs to be agreed with employees to put them in the JSS

What agreements do we need in place?

You will need to agree any new arrangements with 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.

What should the agreement cover?

The agreement will need to cover the reduced hours that the employee will be working, the extra top-up pay they will receive through the scheme, and what happens in respect of the unworked hours that are not covered by the top-up. It should also cover the arrangements for moving the employee out of the JSS if necessary.  If you are using the JSS extension, you will need to agree that the employee will stop work altogether for the period you are claiming for.

Employers may want to wait until the guidance is released and we have further details before finalising any arrangements with employees, although this needs to be balanced against the short window of time that is available before the scheme comes into effect on 1 November. Employers who anticipate using the JSS on a large scale, or who are already in the course of redundancy consultations in relation to which the scheme may be viewed as an alternative, may feel they have little choice but to move more swiftly.

Alternative resourcing options for employers outside the JSS


If you have some work, but not enough to keep everyone on their pre-pandemic hours, one option is to select some staff for redundancy while keeping others employed on their full hours. There is an argument that it is unfair to make employees redundant when a government-supported JSS is available as an alternative. However, the fairness of a redundancy dismissal depends on all the circumstances at the time, including the employer’s resources. It will not necessarily be unfair to make employees redundant instead of using the JSS, particularly given the additional costs incurred by the employer in making use of the scheme. 

Reduced hours working outside of the scheme

Another option is to agree a reduced working week with employees that does not involve putting them into the JSS. For example, it would be possible to agree with an employee that they will work for a third of their original normal hours and be paid for those but without seeking recourse to any further top-ups under the JSS. Any proportion of working hours could be agreed under such an arrangement and it would not require a minimum of 33%. The employer could even offer a top-up.

From the employee’s perspective, however, this is a much less attractive arrangement. Unless your underlying agreement with the employee allows for reduced hours or sets no minimum normal hours, this sort of agreement will need to be negotiated with the employee.

Unpaid leave

It is possible that some employees will prefer a period of unpaid leave to redundancy or reduced hours working – for example, if they are Covid-vulnerable and do not want to go to the workplace at the moment. This might even be a reasonable adjustment if the employee is disabled within the meaning of the Equality Act 2010.



HM Gov’s Coronavirus Job Retention Scheme  (CJRS) has been extended until the end of October 2020 but with changes to the system. The last effective date for workers being put on furlough is 10 June. 

The two big changes are the tapering of the financial support given to employers and the rise in their contributions. 

Financial support taper

June and July: HM Gov continue to 80% of wages up to a cap of £2,500 plus employer NIC and pension contributions. 

August: HM Gov still pays 80% of wages up to a cap of £2,500 but employers must pay employer NIC and pension contributions  .

September: HM Gov pays 70% of wages up to a cap of £2,187.50. Employers pay employer NIC and pension contributions and also 10% of wages to make good the 80% total  – up to a cap of £2,500. 

October: The government pays 60% of wages up to a cap of £1,875. Employers pay employer NIC and pension contributions and now 20% of wages to make good the 80% total up- to a cap of £2,500.

Employers are still entitled to top up above those minimum figures.

Flexible furloughing

This is to help businesses wean back employees on to the payroll after June. Part time or ‘flexible furloughing’ as it is called will allow employers and employees to agree to work part-time ( at their contracted full salary rate) and the Furlough Scheme will cover those days when employees are not working.

The matrix will become quite complex and detailed time sheets must be maintained. More detailed information about CJRS is expected on 12 June. For now, for further details on the existing CJRS system please see our old posts or for fuller details see HM Gov facts sheet at :-HMRC Fact Sheet


Job Retention Bonus

Claims for the £1,000 bonus per eligible employee, agency worker or office holder must be made between 15 February 2021 and 31 March 2021. This is a change of approach which will also be reflected in the job support scheme.

Under CJRS it was a case of ‘pay now, check later’ to ensure businesses had sufficient cashflow to make salary payments. But with the job support scheme (JSS) and the bonus scheme, HMRC will move to a ‘check first, pay later’ model, with RTI data validating claims. Where a CJRS claim is still being investigated this can delay the bonus payment being made by HMRC.


Employers will be eligible to claim the bonus for an employee, if that individual was included in a claim under the CJRS and they remain continuously employed until 31 January 2021. Employers can claim for the same employees under the JSS and receive the £1,000 bonus.

If an employee was transferred under a TUPE arrangement to the employer’s payroll, that new employer must have made at least one CJRS claim for them before that finishes on 31 October.

An employee must have received taxable pay in each of the three tax months:

  • 6 November – 5 December
  • 6 December – 5 January
  • 6 January – 5 February


  • The employee must have received at least £1,560 as taxable pay across those three tax months, any tax free allowance or adjustment as driven by their tax code is not deducted/added to the taxable pay. 


  • The full payment submission for each of those three months has been sent under RTI to HMRC on time and is accurate.

It follows then that an employee who is paid £2,000 in November and December and then offered no work in January would not be eligible for the bonus. Although that employee meets the minimum income threshold, as they had not received a payment in each tax month, they would not qualify.


An employee ceases to be eligible for the bonus scheme if:

  • The employer has repaid all CJRS grant claimed in respect of that employee.
  • They are not paid at least once in each of the three tax months.
  • Their total taxable pay does not reach £1,560 across the three months.
  • A leaving date has been reported on or before 31 January 2021.
  • They are placed on contractual or statutory notice of termination of their employment at any point before 31 January 2021.

The contractual notice of termination of employment applies to all reasons for leaving including retirement, not just redundancy. It follows that it would be an abuse of the scheme to delay reporting a leaving date, and this of course could be validated by RTI data.

Minimum income threshold

There are some particular points to note about the minimum income threshold of £1,560.

  • The threshold relates to total taxable pay in a tax month regardless of how many times the employee is paid in the tax month.
  • Periods of family related or sick leave do not lead to any reduction in the minimum income threshold.
  • Employers who are payrolling benefits in kind will have a higher gross taxable pay figure as it will include the notional amount for the benefits in kind as well as their cash earnings. There is no indication in the guidance that HMRC requires payrolled benefits to be deducted from taxable pay.
  • There is no reference to tronc schemes in the guidance. If a tronc is set up as a separate PAYE scheme it will have taxable pay which could reach the minimum income threshold. But as the tronc master is not the employer and therefore cannot be said to have made a claim on behalf of the employee, one would expect that such PAYE schemes would not be eligible. Conversely if tips are being paid through the employer’s PAYE scheme as taxable pay then they would be included in the minimum income threshold.

The guidance refers to gross taxable pay but then requires net taxable pay to be used where there are tax relieved amounts. If you look at the example of Charlotte as she is in a net pay arrangement pension her contributions reduce her gross taxable pay and only the net amount is used to assess if the threshold is reached. If Charlotte had been in a relief at source pension scheme, pension contributions come off net pay so she would have qualified for the job retention bonus based on the minimum income threshold.

I assume that charitable giving and share incentive plan contributions will similarly reduce gross taxable pay for the minimum income threshold.

Compliance and preparation

In preparation for making a claim HMRC requires the employer to file all their RTI returns accurately and on or before the contractual payment date for the whole of the 2020/21 tax year. It is not clear if the employer has used the three day late reporting easement, or has a first late reporting default, if this would invalidate the employer from using the bonus scheme.

HMRC asks that the employer use the ‘irregular payment pattern indicator’ in the full payment submission (FPS) if the employee is not paid regularly. Any requests for information from HMRC in respect to CJRS claims must be dealt with promptly as these can delay payment of the bonus or lead to a claim being rejected.

Agents who are authorised for PAYE online can make claims on behalf of clients.

Taxable income

The bonus is taxable income for both corporation tax and income tax purposes. However, where it is payable to an individual who is also happens to be an employer of a nanny or a member of domestic staff, the bonus is not classed as part of the individual’s taxable income for the year.