Prime Minister Boris Johnson announced on Saturday that the Coronavirus Job Retention Scheme (CJRS), also known as the Furlough scheme, will be extended to cover the new national lockdown period in England, which is to run from 5 November to 2 December. The CJRS had been due to close on 1 November and be replaced with the Job Support Scheme. More information has been made available and the CJRS will continue to be available until the end of March 2021.
The current rate will continue until the end of the year (2020) at which point Chancellor Sunak will review levels and determine whether or not conditions are improved to the extent employers will be asked to contribute more.
We understand that for the period of the extension to the end of the year, the level of grant will be the same as those levels available in August, where (for the hours the employee does not work) the Government will pay 80% of an employee’s wages, to a monthly cap of £2,500, with the employer responsible for paying employer NICs and pension contributions only.
Some points of note relating to the extended scheme:
- Employers across the UK can claim, whether open or closed. Employers do not need to have been pre-extension CJRS claimants.
- Employers can claim for staff who were PAYE payroll employees at 30 October. Employers will have flexibility to use the scheme for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis, and will be able to vary the hours worked in agreement with the employee. As under the current CJRS rules, employees can be on any type of employment contract.
- Employer contributions for the extension period (to January) will be as they were in August 2020. So, for hours not worked, employers only need to cover NIC and employer pension contributions.
- Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for. This includes employees on a fixed term contract, on payroll on 23 September, where that contract expired after 23 September, provided that the other eligibility criteria are met.
- The restrictions on working for employees who are furloughed are unchanged.
It is of course possible that changes may be announced outside of the review scheduled for January, in reaction to the changing nature of the impact of Covid-19. We will endeavour to provide updates as and when more information is made available.
Content correct at the time of writing and is intended for general information only and should not be construed as advice.