Insights
Insights 15.7.20 Author: Andreja Okamgba

Summary of the Monthly Changes to the Coronavirus Job Retention Scheme (CJRS) and the Bonus

Insights 15.07.2020 Author: Andreja Okamgba

One of the main purposes of the Coronavirus Job Retention Scheme (CJRS) has been to support continued employment rather than face the prospect of mass redundancy.

Nevertheless, tapering off the CJRS support between July and October when the scheme will close means that in some businesses redundancies are becoming inevitable, before the scheme support is completely withdrawn. We have addressed this in our redundancies article.

July can arguably be described as the most generous month in the life of the scheme. Flexible furlough is allowed, and employers will still be eligible for reimbursement of 80% of wages of furloughed workers, the corresponding employer’s NI contributions and pension contributions.

In August the employer’s NI contributions and pension contributions elements of the reimbursement will be removed and the claim under the CJRS will only include 80% of wages.

In September the reimbursement will drop to 70% while the employees will still be entitled to receive 80%, meaning that the employer will have to fund the 10% shortfall. In October the support will drop further to 60% with the employer responsible for covering 20% to ensure that the furloughed employees still receive 80% of their normal earnings for the time they are not working.

In his Summer Statement, the Chancellor confirmed that the scheme will close at the end of October 2020, but the Government will introduce a new CJRS bonus to reward and incentivise employers who continue to employ their furloughed employees through to 31 January 2021. The bonus will be a one-off payment of £1,000 per employee. Further details about the CJRS bonus scheme will be announced by the end of July.

What next?

Our HR Consultancy team are here to help with any concerns or questions you may have, please do not hesitate to get in touch.

Coronavirus Job Retention Scheme Updates Timeline

The scheme closes to new entrants on 30 June. 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.

june 2020

From 1 July the scheme will be restricted to employers who have previously used it, and to employees who have previously been furloughed – to satisfy the minimum 3 weeks’ furlough period, the last day to furlough someone is therefore the 10 June. Flexible furlough is allowed, and employers will still be eligible for reimbursement of 80% of wages of furloughed workers, the corresponding employer’s NI contributions and pension contributions.

july 2020

The Government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions.

august 2020

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.

september 2020

The scheme will close at the end of October 2020. 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.

october 2020

The Government will introduce a new CJRS bonus to reward and incentivise employers who continue to employ their furloughed employees through to 31 January 2021. The bonus will be a one-off payment of £1,000 per employee.

january 2020