Coronavirus Job Retention Scheme (CJRS) Changes
The Chancellor, Rishi Sunak, has announced a further extension to the CJRS scheme for employers.
Originally this scheme was announced back in March to cover March, April and May 2020, with an original extension to June 2020.
What the Chancellor has announced is that the scheme will continue until 31 October 2020 but with some changes.
Up until 30 June 2020 the government will cover 80% of the Wages (up to £2,500 per month), plus National Insurance and Pensions contributions for furloughed employees by way of a grant.
What is changing is that the government support grant will reduce but there is also a new concept of flexible furloughing.
Changes to grants
The table below show
|Month||Government grant available for:|
|March – June 2020||80%||80%||80%|
Employers will still be required to pay at least 80% to the furloughed employee so employers will start to pay towards these costs in the coming months.
The Chancellor has said that the CJRS will close on 31 October 2020.
Changes to claim periods
Up until 30 June 2020 it was possible to claim the grant from the government at any point. What is changing is that a grant must now start and end in the same month.
For example, a grant claim for 1 July 2020 to 31 July 2020 must be made on or before 31 July. For employers that pay on the last day of the month this will bring an added pressure so we suggest that the payroll run date is brought forward a few days to avoid this bottleneck.
It is possible to make more than one claim in the same month. Each claim must be for a period of at least seven days except for a claim for a few days at the beginning or end of a month – this is particularly relevant for weekly paid employees when a week may straddle two months.
The Chancellor has also announced that from 1 July 2020 flexible furloughing will commence.
This is designed to assist employers who may want to bring staff back part-time. Under the previous rules if a person worked for any period in a three week furlough the grant is not available. To try and get employers to get their teams back to some work the concept of flexible furloughing will allow this. The three week furlough requirement is abolished from 1 July 2020.
From 1 July 2020 the employer cannot receive a grant from the government for more employees than were furloughed prior to 30 June 2020. This is because the scheme is now designed as a push to get employers to start returning staff to work.
The employee will be paid by the employers for the hours they work and the government pays the usual grant for the hours that they don’t (based upon the table above).
The claim system will change in July so reporting the number of hours worked (which are paid as normal) and not worked (which qualify for the government grant) will now be crucial. For those clients that we prepare the payroll this is the information we will be asking you to supply.
This is relatively straightforward for an employee with a fixed hours contract. For employees paid by the hour a proportional system of hours is used looking back over the period from 6 April 2019 to the date the employee was furloughed. Details can be found at paragraph 2.4 here
For employers it is important to have discussions with employees early about any return to work plans.