Further detail of Job Retention Scheme changes

The Chancellor, Rishi Sunak,  has today announced further details of the forthcoming changes to the Coronavirus Job Retention Scheme (CRJS) which were trailed in his announcement on 12 May 2020:

  • The CJRS will continue until the end of October 2020, with employees on furlough continuing to receive 80% of salary up to a maximum of £2,500 per month. The amount of Government contribution will be tapered down, with employers accessing the scheme required to contribute at the following levels –
      • In June and July the scheme will continue as before with no employer contribution;
      • In August, employers will pay employer’s national insurance and auto-enrolment pension contributions (which roughly total 5% of employment costs);
      • In September, employers will pay 10% of furlough pay, with the Government paying 70%;
      • In October, employers will pay 20% of furlough pay, with the Government paying 60%.
    • The Government is introducing flexible furloughing from 1 July,  rather than from 1 August as previously announced.    There will be maximum flexibility with no central definition of part-time hours – so from 1 July, employers will have complete flexibility to decide on the right arrangements for them and their staff.   The Chancellor gave as an example an employee being brought back for two days per week.   The employer would pay for two days and the furlough scheme would cover the other three days.
    • To introduce the new flexible furlough scheme from 1 July,  the current furlough scheme will close to new entrants on 30 June.   Employers wanting to place new employees on the current furlough scheme will need to do so by 10 June to allow time to complete the minimum 3 week furlough period before then.
  • The Chancellor also announced that the Self-Employment Income Support Scheme is being extended.   Applications will open in August for a second grant which will be paid out in a single instalment covering three months of average monthly profits.  To maintain fairness alongside the CJRS,  the value of the final grant will be 70%, up to a total of £6,570.  There will be no further extensions to this scheme.
  • The Government has released a fact sheet on the revisions to the CJRS and SEISS but, otherwise, no further guidance or legislation has yet been released.  The fact sheet states that further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.