When the country entered lockdown, many feared for their jobs and livelihood. Thankfully, the Government introduced the Coronavirus Job Retention Scheme (CJRS), providing a lifeline to millions of employees.
As of 19 July 2020, 9.5m employees had been placed on furlough, with 1.2m employers benefitting from the support scheme that provided £29.5bn.
However, the Government cannot sustain this level of support, meaning that the funding must come to an end. The scheme is now in its final phase which runs from 1 July 2020 to 31 October 2020.
This phase is designed to facilitate the transition from Government support to employers once again meeting the costs of having employees.
From 1 July 2020, employees that were on furlough can return to working on reduced hours, under the flexible furlough rules.
We have a full blog on flexible furloughing, which you can read here
Employees that haven’t been furloughed for at least three consecutive weeks prior to 1 July 2020 can’t claim the grant under the scheme from July onwards, unless the employee returns from statutory leave.
During this final phase, employees will still receive 80% of their pay up to the equivalent of £2,500 a month, which is the minimum furlough pay.
From 1 August 2020, the financial support provided under the scheme will begin to reduce. After this point, employers cannot claim back employer’s NI and minimum pension contributions on grant payments, these will be made by the employer themselves.
During September, employers can only claim 70% of the employee’s pay, reducing further to 60% for October. Despite this, furloughed employees must continue to receive minimum furlough pay, meaning employers must make up the shortfall.
What is the Job Retention Bonus?
Despite the help provided, some employers may still have to let some employees go.
The Government are keen to ensure that as many employees as possible can retain their jobs. To encourage this, the Government will pay a Job Retention Bonus of £1,000 for each furloughed employee who is employed continuously from the end of the CJRS until 31 January 2021.
To qualify for this bonus, the employee’s earnings during this period must be at least equal to the lower earnings limit for Class 1 National Insurance purposes, which means they must earn at least £120 per week for 2020/21.
If eligible, bonuses will be paid from February 2021.
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