Coronavirus Job Retention Scheme Funding for Furlouged Employees

As one of the first measures announced by the UK Government to support businesses, the Coronavirus Job Retention Scheme (CJRS) funding for furlouged employees has been accessed for circa 9 million workers.

In his Summer statement, the chancellor announced a series of updates to the CJRS which are now underway.

From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.

From 1 August 2020, the level of grant will be reduced each month.To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.

The timetable for changes to the scheme is set out below. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours:

June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.

August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.

September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.

October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

The furlough scheme will wind down flexibly and gradually until 31st October with a jobs retention bonus to help wind down the scheme: businesses will be paid £1,000 to retain furloughed staff.  More details to come.

We advise that you read all the available guidance on GOV.UK before you apply. CJRS is now part of the Chancellor’s Plan For Jobs.

HMRC: Changes To The Job Retention Scheme

We know that keeping up with the various changes to the Coronavirus Job Retention Scheme, and ensuring that you’re using flexible furloughing to support your business is a job in itself.  HMRC are offering all businesses a webinar entitled ‘Extension to the Coronavirus Job Retention Scheme and flexible furloughing’ for the latest information, including:  

  • overview of changes to the scheme, including how you can now bring previously furloughed employees back to work to suit the needs of your business
  • introduction to flexible furloughing and how it works
  • example of how to work out the wages of flexibly furloughed employees
  • information on key dates and claims periods
  • overview of upcoming changes to the scheme in August, September and October as the level of the grant is slowly reduced and employers will be asked to contribute towards the cost of furloughed employees’ wages.

If you would like to join, click through to choose a date and time.

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