Ireland: Chancellor Announces Postfurlough Job Support Scheme

The construction industry will welcome that the Government has announced post-furlough support. As part of the Winter Economy Plan package of measures, the Chancellor outlined a new Job Support Scheme (JSS). It replaces the Coronavirus Job Retention Scheme, which closes on 31 October 2020.

From 1 November 2020, the JSS aims to protect viable jobs in businesses who are facing lower demand over the winter months due to COVID-19.

Key features of the JSS are:

• It will run for six months and is open to all employers with a UK bank account and a UK PAYE scheme.
• All Small and Medium-Sized Enterprises (SMEs) will be eligible.
• Large businesses will be required to demonstrate that their business has been adversely affected by COVID-19 by meeting a financial assessment test. Therefore, the JSS will only be available to those whose turnover is lower than before experiencing difficulties. The Government expects that large employers will not be making capital distributions (such as dividends or share buybacks), while using the JSS. The financial assessment test will not apply to SMEs.
• It is designed to sit alongside the Jobs Retention Bonus and employers can benefit from both schemes.
• The JSS is open to businesses across the UK even if they have not previously used the furlough scheme.
• The Government will contribute towards the wages of employees working fewer hours than normal due to decreased demand.
• The employee must not be on a redundancy notice and must have been on the employer's PAYE payroll on or before 23 September 2020.
• Employees must be working at least 33% of their usual hours. Of the remaining two-thirds of each worker's usual pay, the Government will pay 33% and the employer will pay 33%, meaning that the employee will receive 77% of their usual monthly wage. The employer will effectively pay 55% and the Government will be paying 22%, capped at a maximum £697.72 a month.
• The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
• Employees will be able to cycle on and off the JSS 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.

• Employers will be able to make a claim online through Gov.uk 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 a Real Time Information return.

The Government has provided the following worked example:

• 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 JSS, 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.

James Hutchinson, a Partner at Beale & Co, said:

"The construction industry will welcome that the Government has pulled back from the furlough cliff-edge. The new Job Support Scheme will likely save many viable jobs, as we enter an uncertain winter.

However, the Job Support Scheme is significantly less generous that the current Coronavirus Job Retention Scheme and it might not apply to many large employers.

We only have the Government's general information about the scheme and, as ever, the detail of how it will operate is important."

The Government has published general information on the JSS here and a fact sheet with additional information here. We will provide further comments in due course.