We study a simple lattice model of shear-induced clustering in two dimensions in which clusters of particles aggregate under an imposed shear flow and fragment stochastically. Two non-equilibrium steady states are identified: an unjammed state and a jammed state characterised by a system-spanning cluster. A discontinuous jamming transition with strong hysteresis occurs as the shear rate is increased or fragmentation rate decreased. We study the kinetics of jamming and measure power law cluster size distributions. We also consider some general simulation issues including the role of Galilean invariance.